This report describes the essential features of corporate governance within the Swiss Life Group. The structure below largely follows the Directive on Information Relating to Corporate Governance issued by the SIX Swiss Exchange, which came into force on 1 July 2002, and was revised on 1 January 2007 and 1 July 2009, and also takes into consideration the regulations on transparency stipulated in the Swiss Code of Obligations with regard to the compensation of members of the Board of Directors and the Corporate Executive Board and FINMA circular 2010/1 on minimum standards for remuneration schemes of financial institutions. Further information on the Code of Conduct and the values of the Swiss Life Group can be found in the section “Values” (page 38) in the Business Review.
SHAREHOLDERS — Shareholdings 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, 33 1/3 , 50 and 66 2/3% of the voting rights. Details are set out in the Federal Act on Stock Exchanges and Securities Trading (SESTA) and Stock Exchange Ordinance-FINMA (SESTO-FINMA).
The relevant disclosures of significant shareholdings can be found on the publication platform of the SIX Swiss Exchange’s disclosure office at www.six-exchange-regulation.com, “Obligations” area, “Disclosure of Shareholdings” section and “Significant Shareholders” subsection (www.six-exchange-regulation.com/obligations/disclosure/ major_ shareholders_en.html).
Dodge & Cox, 555 California Street, 40th Floor, San Francisco, CA 94101, USA, reported in the publication of 6 March 2008 that it held through the Dodge & Cox International Stock Fund 1 645 000 registered shares, corresponding at the time to a 4.71% share of the voting rights of Swiss Life Holding. No disclosure reports were received from Dodge & Cox in the year under review.
Carsten Maschmeyer, Hanebuthwinkel 17, 30655 Hanover, Germany, reported in the publication of 13 December 2011 that the Group subject to disclosure requirements consisting of Carsten Maschmeyer, his two sons, Marcel Jo Maschmeyer and Maurice Jean Maschmeyer, as well as the asset management firms CM Vermögensverwaltung GmbH & Co. KG and CM Vermögensverwaltungs-Geschäftsführungs GmbH, had been expanded to include MM Familien KG, because of the transferral by Group members of some of their Swiss Life Holding shares to MM Familien KG. At the same time he reported that his shareholding had fallen below the disclosure threshold of 3%.
No cross participations exceeding the 3% threshold exist between Swiss Life Holding or its subsidiaries and other listed companies.
Since the establishment of Swiss Life Holding on 17 September 2002, a number of capital market transactions have been conducted. A detailed description of the transactions carried out up to and including the end of 2008 can be found in the Corporate Governance section of the annual reports for the relevant years. The annual reports can be accessed at www.swisslife.com, “Investors” area, “Results & Reports” section, “Archive Reports” and “Annual Reports” subsections (www.swisslife.com/en/annualreports).
On 7 May 2009 the General Meeting of Shareholders of Swiss Life Holding decided on a capital reduction of CHF 51 059 500 by cancelling 3 003 500 registered shares with a par value of CHF 17 each, which were acquired under the share buyback programme approved on 8 May 2008. As a result the share capital decreased from CHF 596 437 418 to CHF 545 377 918. The General Meeting of Shareholders also decided to pay a dividend of CHF 5 per registered share, in the form of a reduction in par value. The share capital thus decreased from CHF 545 377 918 (32 081 054 registered shares, each with par value of CHF 17) to CHF 384 972 648 (32 081 054 registered shares, each with par value of CHF 12). At the same time the conditional share capital was reduced to CHF 28 312 632 (2 359 386 registered shares, each with par value of CHF 12). In 2009 no conversions were made on the 0.625% convertible bond (2004–2010).
On 5 May 2011 the General Meeting of Shareholders of Swiss Life Holding decided to reduce the par value by CHF 4.50 per share from CHF 9.60 to CHF 5.10. The share capital thus decreased to CHF 163 613 375.40, divided into 32 081 054 registered shares. At the same time the conditional capital was reduced to CHF 12 032 868.60, divided into 2 359 386 registered shares with a par value of CHF 5.10 each.
Regulations are in place to govern transactions in Swiss Life Holding shares carried out by Swiss Life Group employees. Pursuant to the Code of Conduct and the Swiss Life Group’s Directive on Insider Information, all purchases and sales of Swiss Life Holding securities made by members of senior management or employees who are privy to confidential information are subject to a reporting requirement. Transactions by persons who, by virtue of their position, have regular access to insider information are also subject to a prior approval requirement. A general blackout period is imposed annually from 1 January until 24 hours after the year-end results have been presented and from 1 July until 24 hours after the half-year results have been presented, as well as from ten days before until 24 hours after publication of the interim statements for the first and third quarters.
LIMITATIONS ON TRANSFERABILITY AND NOMINEE REGISTRATIONS — 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 General Meeting of Shareholders and must be approved by two thirds of the voting shares represented and by an absolute majority of the share par value represented.
CONVERTIBLE BONDS AND OPTIONS — No convertible bond issues of Swiss Life Holding were outstanding on the balance sheet date.
ELECTIONS AND TERMS OF OFFICE — Pursuant to the Articles of Association, the Board of Directors shall consist of no fewer than five and no more than fourteen members. The members of the Board are elected by the General Meeting of Shareholders for a maximum term of three years, and on an individual basis. The Organisational Regulations stipulate that a member of the Board of Directors shall automatically resign from the Board at the General Meeting of Shareholders in the year in which the member reaches the age of 70.
COMPOSITION — In the year under review, no member of Swiss Life Holding’s Board of Directors exercised any duties relating to operational management within the Swiss Life Group. Furthermore, no such duties were exercised by any Board members during the three financial years preceding the reporting period, with two exceptions: Rolf Dörig, who held the position of Chairman of the Group’s Corporate Executive Board until his election to the Board of Directors in May 2008, and Carsten Maschmeyer, who stepped down from the Board of Directors of Swiss Life Holding on 7 December 2011, who was Co-CEO of AWD until March 2009.
Prior to accepting appointments to the Board of Directors of other companies, the members of Swiss Life Holding’s Board of Directors must receive the approval of the Board of Directors at Swiss Life Holding. Information on additional board mandates held by individual members of the Board of Directors is presented in the following.
Gerold Bührer 1st Vice Chairman Nomination and Compensation Committee 2002/2003/2005/2008/20111 2014
Rolf Dörig laid the groundwork for his professional career by obtaining a doctorate in law (Dr. iur.) from the University of Zurich before being called to the bar in Zurich. Joining Credit Suisse in 1986, he assumed a number of executive responsibilities in various areas of banking and in different geographical markets. As a Member of the Executive Board, he was assigned responsibility for Swiss Corporate and Retail Banking from 2000 onwards. In 2002 he assumed the role of Chairman Switzerland of Credit Suisse. Following his move to Swiss Life, Rolf Dörig held the positions of Chairman of the Corporate Executive Board from November 2002 to May 2008 and Delegate of the Board of Directors from May 2008 to May 2009.
Other appointments: – Vontobel Holding Ltd, Member of the Board of Directors/Chairman of the Risk and Audit Committee – Drosos Foundation, Member of the Board of Trustees/Chairman of the Finance Committee
Other appointments: – fischerAppelt AG, Hamburg, Chairman of the Supervisory Board – WAVE Management AG, Hamburg, Chairman of the Supervisory Board (until May 2011) – HanseMerkur Krankenversicherungsgruppe, Hamburg, Vice Chairman of the Supervisory Board
DAMIR FILIPOVIC — Born 1970, Swiss national Member of the Board of Directors
Damir Filipovic studied mathematics at the Swiss Federal Institute of Technology in Zurich (ETHZ), where he qualified in 1995 and gained a doctorate in financial mathematics in 2000. He then held research posts at various universities abroad, including the US universities of Stanford, Columbia and Princeton. He was appointed assistant professor at the University of Princeton in 2002, and then from 2003 to 2004 he worked on the development of the Swiss Solvency Test at the Federal Office of Private Insurance in Switzerland. Damir Filipovic went on to hold the chair of financial and actuarial mathematics at the Ludwig Maximilian University of Munich from 2004 to 2007. From 2007 to 2009 he was head of the Vienna Institute of Finance, a research institute affiliated to the University of Vienna and the Vienna University of Economics and Business. In 2010 he was appointed Swissquote Chair in Quantitative Finance and Swiss Finance Institute Professor at the Swiss Federal Institute of Technology in Lausanne (EPFL).
Other appointments: – Sigurd Rück Ltd, Chairman of the Board of Directors – Cassa Pensioni della Città di Lugano, Member of the Board of Directors and the Audit Committee – Casino de Montreux SA, Chairman of the Board of Directors and Member of the Audit Committee – Otis, Member of the Board of Directors – Autogrill Switzerland LTD, Member of the Board of Directors – Banque Morval SA, Member of the Board of Directors – PKB Privatbank AG, Member of the Board of Directors and the Executive Committee – Sowind Group Ltd, Member of the Board of Directors – Global Petroprojects Services Ltd, Member of the Board of Directors – Swiss Olympic Association, Vice Chairman of the disciplinary chamber in charge of doping cases
Franziska Tschudi graduated in law at the University of Berne and passed her bar exam there in 1984. She studied law at Georgetown University, Washington DC, earning an LL.M. in 1986, and passed the bar exam for the US states of New York and Connecticut in 1987. Franziska Tschudi completed postgraduate studies at the University of St. Gallen (1991 to 1993), receiving an Executive MBA. After initially working as an Assistant for Media Law at the Institute for Constitutional and Administrative Law at the University of Berne, and practising business and media law in
Other appointments: – BIOMED AG, Member of the Board of Directors – St. Gallen-Appenzell Chamber of Commerce and Industry, Vice Chairperson – economiesuisse, Member of the Executive Board – Swissmem, Member of the Executive Board
RESIGNATIONS — After serving for eight years on Swiss Life Holding’s Board of Directors, Paul Embrechts did not stand for re-election at the General Meeting of Shareholders in 2011 and no longer serves on the Board of Directors. Carsten Maschmeyer, who was elected to Swiss Life Holding’s Board of Directors at the General Meeting of Shareholders in 2009, stepped down as a member of the Board of Directors on 7 December 2011.
INTERNAL ORGANISATIONAL STRUCTURE — In accordance with the Articles of Association, the Board of Directors has issued Organisational Regulations setting forth the internal organisational structure and the duties and competencies of the Board of Directors, the Board of Directors’ committees, the Chairman of the Board of Directors and the Corporate Executive Board. The Organisational Regulations are reviewed regularly and adjusted where necessary. They are available on the internet at www.swisslife.com, “About us” area, “Organisation” section (www.swisslife.com/en/organisation ).
CHAIRMAN’S AND CORPORATE GOVERNANCE COMMITTEE — The Chairman’s and Corporate Governance Committee (Chairman’s Committee) assists both the Chairman of the Board of Directors in performing his leadership and coordination duties and the Board of Directors with issues relating to corporate governance. The Committee also supports the Board of Directors in key strategic decisions.
The NCC consists of at least three members, all of which 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.
Nine meetings of the Investment and Risk Committee were held in the year under review. Each session lasted for around two hours on average. All members attended all the meetings, with the exception of one member who was excused from two meetings. The Chairman of the Board of Directors attended seven meetings of the Investment and Risk Committee. The Group CEO and the Group CFO were present at all meetings, with the exception of one. The Group CIO also attended all meetings.
AUDIT COMMITTEE — The Audit Committee assists the Board of Directors in its supervision of the accounting function and financial reporting activities, as well as compliance with the legal framework. It reviews the appropriateness of the internal control structures and processes used to comply with the legal requirements. It monitors the activities of Corporate Internal Audit and the external audit services, and takes due note of their reports and recommendations. The Committee is empowered to make decisions with respect to defining the terms and conditions for mandates to external auditors and keeps the Board of Directors appropriately informed. Moreover, the Audit Committee issues the regulations for Corporate Internal Audit and sets its annual programme of activities.
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 33). 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 around three hours on average. There was full attendance at all meetings, with the exception of two meetings, which each time one member was unable to attend. The Group CEO was present at all meetings. The Group CFO, the Head of Corporate Internal Audit and representatives from the external audit services also attended all meetings. To prepare for the meetings relating to the annual and half-year reports, the Audit Committee regularly calls on the services of an independent financial and business expert.
If required, the Board of Directors and its individual committees regularly invite all or some members of the Corporate Executive Board and in-house specialists to their meetings. Outside the meetings, each member of the Board of Directors may request information about the course of business from the Corporate Executive Board subject to the prior notification of the Chairman of the Board of Directors. Requests for information on individual transactions require the prior approval of the Chairman of the Board of Directors.
The organisation and division of tasks within the Corporate Executive Board 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 division. They issue directives for their division within the context of legal and regulatory requirements, the relevant regulations and the Group directives valid for the Group as a whole.
Ivo Furrer graduated in law from the universities of Zurich and Fribourg and earned his PhD with a thesis on employee benefits in Switzerland. After joining Winterthur Life in 1982, he worked for several years in international industrial insurance in Switzerland, the UK and the USA. In 1998 he was appointed Chief Underwriting Officer at Winterthur International. He subsequently moved to Credit Suisse Group, where he was Head of e-Investment Services Europe and member of the management of Personal Financial Services. Ivo Furrer began working for Zurich Financial Services in 2002, initially in Germany as head of the international key account business, and in 2005 as a Member of the Global Corporate Executive Committee. In 2007 he was appointed CEO Life Switzerland and Member of the Global Life Executive Committee of Zurich Financial Services.
Other appointments: – Swiss Insurance Association (SIA), Chairman of the Life Insurance Committee – German-Swiss Chamber of Commerce, Member of the Board – Member of the Board of Directors of the Financial Market Authority (FMA) Liechtenstein
After graduating with a degree in economics from the University of Augsburg, Klaus G. Leyh worked for two years as a market researcher and advisor in the consumer goods industry. In 1995 he changed to the insurance sector, building up Generali’s Market Research department in Munich. He subsequently held management positions in marketing, product management and e-business at Generali Lloyd Versicherung AG, AXA Colonia Konzern and ARAG Lebens- und Krankenversicherung, and received a Master of Business Research (MBR) from the Ludwig Maximilian University of Munich. In 2001 Klaus G. Leyh joined Swiss Life in Germany as the head of its e-commerce and e-business activities and was assigned responsibility for distribution service, control and promotion in 2002. From January 2006 to September 2008 he held the position of Chief Market Officer and Member of the Executive Board of Swiss Life in Germany with responsibility for the entire sales force, distribution management, service and control.
Manfred Behrens moved to Swiss Life in January 2004, where he held the position of Chief Executive Officer of Swiss Life in Germany (CEO Germany) until August 2008. He was appointed Co-Chief Executive Officer of AWD (Co-CEO AWD) in September 2008. In April 2009 he assumed the role of Chief Executive Officer of AWD (CEO AWD).
The information in this report is presented in the same way as the previous year. The information on compensation granted to Corporate Executive Board members also includes variable cash compensation (the cash bonus and the new deferred compensation in cash introduced on 1 January 2012), which was determined by the Board of Directors at the beginning of 2012 and is published on an accrual basis as compensation for the 2011 financial year. As a matter of new policy, the members of the Board of Directors are granted exclusively fixed compensation, payable 70% in cash and 30% in Swiss Life Holding shares, which are subject to a three-year blocking period. This replaces the previous arrangements, whereby Board of Director members received variable compensation in the form of blocked shares amounting to a maximum of 15% of the fixed compensation, depending on the business results.
COMPENSATION POLICY PRINCIPLES — The Board of Directors as a whole is responsible for establishing the guidelines on the Group’s compensation policy (incl. variable compensation and equity compensation plans) and on employee benefit institutions. The compensation policy underpins the performance culture required by the corporate strategy and is part of the HR policy. The aim is to retain well-qualified employees and gain new, highly skilled staff. The compensation system is in line with the market environment and must be competitive. The individual overall compensation takes into account the employee’s professional skills, engagement and personal performance. It is made up of the basic salary, a variable bonus based on achievement of the annual objectives, which is generally paid in cash and possibly in shares, if applicable deferred compensation in cash and a mid- to long-term equity compensation plan, as well as contributions to occupational provisions and risk insurance.
PRACTICE AND PROCEDURE — 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 Nomination and Compensation Committee is responsible for putting forward appropriate proposals. 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 and Zurich Financial Services.
When determining the level of the allocation to the compensation pool, it takes into consideration the annual result, as well as the degree of achievement of medium-term planning targets. The Board of Directors as a whole is also responsible for determining the individual compensation of members of the Corporate Executive Board. It carries out an annual performance assessment of all members of the Corporate Executive Board, based on preparatory work by the Nomination and Compensation Committee. In addition, current aspects of HR policy and, in particular, succession planning are regularly discussed at meetings of the Nomination and Compensation Committee and the Board of Directors as a whole.
Within the framework of the compensation arrangements for members of the Corporate Executive Board, “deferred compensation in cash” was introduced as a new compensation component on 1 January 2012. On the basis of the corresponding regulations, a portion of the variable cash compensation determined by the Board of Directors is not paid immediately but after a period of three years has elapsed and provided that the regulatory requirements are satisfied at that point. The allocated deferred compensation in cash represents an entitlement during the three-year deferral period. The underlying “deferred cash plan” also provides for adjustment and reclaiming mechanisms (clawback). If the employment relationship is terminated by a participant during the three-year deferral period, the entitlements expire worthless.
One member of the Board of Directors resigned in the 2010 financial year. After serving for seven years on the Swiss Life Board of Directors, Rudolf Kellenberger announced his resignation with effect from the General Meeting of Shareholders of 6 May 2010.
Until leaving the Board of Directors at the General Meeting of Shareholders of 5 May 2011, Paul Embrechts was paid compensation in cash to the amount of CHF 34 167 and 57 shares with a three-year blocking period. Carsten Maschmeyer was paid compensation in cash to the amount of CHF 82 000 and 172 shares with a three-year blocking period until he stepped down from the Board of Directors on 7 December 2011.
The variable compensation components are determined by the Board of Directors in accordance with the described compensation policy principles and based on the company result and the achievement of personal goals assessed in the employee appraisal procedure implemented throughout the Group (Group Performance System, GPS). The variable compensation in cash (cash bonus and, if applicable, deferred compensation in cash) is set at a maximum of 117% of the fixed basic salary (“bonus cap”) and requires that all objectives have been considerably exceeded. The allocation of subscription rights to Swiss Life Holding shares (equity compensation plan, RSU plan) is also limited in value to 117% of the fixed basic salary; if deferred compensation in cash, which on its part is subject to the bonus cap mentioned above, is simultaneously allocated, the maximum limit is 64% of the fixed basic salary.
Swiss Life — Financial Statements 2011 2 “Closely linked parties” are natural persons and legal entities pursuant to Art. 678 of the Swiss Code of Obligations that have close personal, economic, legal or de facto ties with members of the governing body. This typically includes spouses, minor children, companies controlled by members of the governing body, and natural or legal persons serving the members of the governing body in a fiduciary capacity.
For the 2011 financial year, the members of the Board of Directors were allocated the following shares, subject to a three-year blocking period: Board of Directors 9158 shares, allocated at values1 of CHF 111.0817 and CHF 73.3828. The shares are subject to a three-year blocking period.
OPTIONS — No share options have been granted in the Swiss Life Group since 2003 and no options are outstanding.
EXPENDITURE FOR OCCUPATIONAL PROVISIONS — Details on the company’s benefit expenditure can be found in the Consolidated Financial Statements (Notes 24 and 32) and the Notes to the Swiss Life Holding Financial Statements. Ordinary contributions have been adjusted following the switch by the employee benefits institutions from defined benefit to defined contribution plan on 1 January 2011. For reasons of transparency, information on the following benefits is provided here: As Chairman of the Board of Directors, Rolf Dörig is affiliated to the employee benefits institutions of Swiss Life for the purpose of occupational provisions. The regular annual employer contribution for Rolf Dörig in the period under review amounted to CHF 225 504.
For Group CEO Bruno Pfister, the regular annual employer contribution in the period under review totalled
The compensation of members of the Board of Directors is paid 70% in cash and 30% in Swiss Life Holding shares, which are subject to a three-year blocking period.
Compensation in blocked shares 362 839 4478 SLH shares with three-year blocking period1
Total compensation 2011 in cash and shares 1 370 839 including regular contribution to occupational provisions of CHF 225 504 1 596 343
HIGHEST TOTAL COMPENSATION, CORPORATE EXECUTIVE BOARD — Bruno Pfister, as Group CEO, received the highest total compensation for a member of the Corporate Executive Board in the period under review.
Total compensation 2011 including regular contribution to occupational provisions of CHF 225 504 2 911 010 including deferred compensation in cash 2 3 271 010 including deferred compensation in shares 3 4 160 328
Total compensation 2010 including regular contribution to occupational provisions of CHF 234 220 2 719 655 1 Including cash bonus of CHF 1 200 000 for the 2011 financial year, determined and paid at the beginning of 2012, and other compensation (child allowances, premium contribution ) totalling CHF 47 996.
FURTHER INFORMATION — In the form of an overview, the following additional information is provided on the Swiss Life Group compensation systems for the 2011 financial year: In CHF (unless otherwise indicated)
3 In particular release of provisions affecting net income due to the expiration of entitlements under equity compensation plans. 4 Compensation which is agreed on the conclusion of an employment agreement to be paid or be due once. Also deemed to constitute a sign-on payment shall be compensation for benefits foregone vis-à-vis a previous employer.
REQUIRED MAJORITIES — In addition to the resolutions provided for by law, a qualified majority (corresponding to at least two thirds of the voting shares represented and an absolute majority of the share par value represented) is required to: – change provisions concerning restrictions on voting rights – dissolve the company (liquidation) – dismiss more than one third of the members of the Board of Directors – change these provisions of the Articles of Association
VOTING SYSTEM AND PROCEDURES — Based on a corresponding authorisation in the Articles of Association, the presiding officer at Swiss Life Holding’s General Meeting of Shareholders generally requests that votes be taken electronically. Swiss Life Holding uses a certified electronic voting system which permits balloting with remote-controlled handsets and records the exact number of voting shares represented.
DUTY TO MAKE AN OFFER — Swiss Life Holding’s Articles of Association provide for neither an “opting up” nor an “opting out” clause within the meaning of Art. 32 and 22 of the Federal Act on Stock Exchanges and Securities Trading (SESTA).
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 General Meeting of Shareholders for one financial year at a time. When Swiss Life Holding was established in 2002, PwC was named as statutory auditor and Group auditor. Since then PwC has been re-elected without fail. PwC has also acted as statutory auditor and Group 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 General Meeting of Shareholders.
The external auditors submit regular written reports on the status of the auditing work. They also submit detailed reports on the half-year and annual financial statements to the Audit Committee. At the end of the year, the external auditors draw up a comprehensive report for the attention of the General Meeting of Shareholders and a detailed
Key facts and figures about the Swiss Life Group and info kits on previous years’ reports are available on the internet at www.swisslife.com, “Investors” area, “Results & Reports” section (www.swisslife.com/results). Details on events relevant to shareholders, analysts and the media (general meetings of shareholders, media conferences, etc.) can be found at www.swisslife.com, “Investors” area, “Financial Calendar” section at www.swisslife.com/financialcalendar.
At www.swisslife.com/subscription, all interested parties can subscribe to the company’s mailing list so as to receive timely ad hoc reports and media releases free of charge via the e-mail distribution system. These releases are also published on the Swiss Life website at the same time as they are sent to subscribers, and are available online for at least two years at www.swisslife.com, “Media” area, “Media releases” section (www.swisslife.com/mediareleases).
In addition to its comprehensive Annual Report and Financial Statements, Swiss Life Holding also publishes its halfyear results. Furthermore, in May and November of each year, it publishes specific details on the previous quarter. All Swiss Life’s annual and half-year reports since 1997 can be accessed on the internet at www.swisslife.com, “Investors” area, “Results & Reports” section, “Archive Reports” and “Annual Reports” subsections (www.swisslife.com/en/annualreports ). A report detailing the key facts and figures on business operations is sent out on an annual basis to all the shareholders listed in the share register.
Risk management is a key component of the Swiss Life Group’s management process. The respective committees of the Corporate Executive Board and the Board of Directors monitor and make decisions in the area of risk management; these are then incorporated into the annual planning process. On the one hand, they comprise qualitative assessments relating to the strategy, to operational risks and to the internal control system (ICS). On the other hand, quantitative elements for each insurance unit, such as risk budgeting and investment strategy, are included in asset and liability management. Based on risk capacity and risk appetite, limits are set in the individual units for the financial risks incurred, according to which the investment targets are set. The qualitative risk management elements mentioned above are presented and discussed below. Detailed information on the risk budgeting process and asset and liability management is provided in Note 5 (Risk Management Policies and Procedures) of the Consolidated Financial Statements.
STRATEGIC RISK MANAGEMENT — Swiss Life uses analytical methods to ensure that strategic risks are dealt with adequately in today’s very demanding economic environment. In its strategic risk management process, Swiss Life incorporates all the information on risks and the risk/return characteristics in its strategic decisions. An understanding of the interplay of individual risks is essential in order to take due account of the factors influencing risks during strategy development so that these factors can be steered appropriately.
SWISS SOLVENCY TEST — The SST is the new Swiss legislation which governs the capital requirements of insurance companies and groups and their reporting to the regulator. It was enacted in 2006 with the revised Insurance Supervision Law and corresponding Insurance Supervision Ordinance and solely constituted a reporting requirement during a five-year transition period before the capital requirements ultimately became binding from 1 January 2011. The SST is a principles-based framework where the main objective is the alignment of the required capital with the underlying risks. The SST capital requirement underpins a high level of confidence that insurers will meet their obligations towards policyholders even in adverse circumstances. The available and the required capital for the SST is determined based on an internal model which is subject to approval by the FINMA. Based on this internal model Swiss Life met the capital requirements.
STANDARD & POOR’S RATING CAPITAL — Swiss Life has defined a target capitalisation in line with its rating ambition. In the Standard & Poor’s risk-based insurance capital model the total adjusted capital (TAC) is the measure used for capital available to meet a company’s capital requirements. TAC is set against the capital required given the company ’s targeted rating category (target capital). The factor-based model takes into account, among other factors, insurance risks, asset value volatility and credit risks. Within the capitalisation analysis, in addition to assessing capital adequacy, Standard & Poor’s also assesses the quality of capital in its various dimensions such as debt, hybrid and reinsurance leverage.
Market consistent embedded value (MCEV) is a measure of the consolidated value of shareholders’ interests in the in-force covered business of the Swiss Life Group. Covered business includes life, health and pension business of the company. The Group MCEV is a measure of the consolidated value of shareholders’ interest in the covered and noncovered business in force of the company. Business in force includes business written as at 31 December 2011; future new business is not included. The notion of market consistent embedded value (MCEV) will alternatively refer within the course of this report to the MCEV of Swiss Life’s covered business, of one of its market units, or to Swiss Life’s Group MCEV.
Covered business includes all of Swiss Life’s life, health and pension business as well as assumed external reinsurance, with the exception of Swiss Life Insurance Solutions AG, which is not material for MCEV purposes. MCEV (and Group MCEV) are net of ceded external reinsurance. Included are namely operations in Switzerland, France, Germany, Luxembourg, Liechtenstein and Singapore. All other businesses such as investment management and AWD are generally included in the non-covered business at their IFRS net asset values, with the exception of France, where they are included in the covered business.
According to MCEV Principle 3, the MCEV represents the present value of shareholders’ interests in the earnings distributable from assets allocated to the covered business after sufficient allowance for the aggregate risks in the covered business. It is calculated on a post-tax basis taking into account current legislation and known future changes.
The MCEV for covered business consists of the net asset value (NAV), i.e. the value of assets not backing liabilities, and the value of in-force business (VIF), i.e., the value of future profits emerging from operations and assets backing liabilities.
In CHF million Value of Net asset value in-force business Total Total
CEV Certainty equivalent value TVOG Time value of options and guarantees CNHR Cost of non-hedgeable risks FC Frictional costs VIF Value of in-force business RC Required capital FS Free surplus NAV Net asset value MCEV Market consistent embedded value scaling only indicative 2.2 MCEV OF COVERED BUSINESS
The value of in-force business decreased by 6%. An increase in certainty equivalent value of CHF 579 million – driven by the new business contribution – was more than offset by the increase of time value of financial options and guarantees. The latter results from a massive increase in interest rate volatilities. The TVOG also includes the cost of credit risk related to investments in corporate bonds. The cost of credit risk on group level amounts to CHF –517 million for 2011 compared to CHF –469 million for 2010.
PRESENT VALUE OF NEW BUSINESS PREMIUMS (PVNBP) 12 914 14 607
The closing adjustments result mainly from capital transfers between covered and non-covered business and currency exchange rate developments.
Expected existing business contribution (reference rate) 6 – 8 14 27
Expected existing business contribution (in excess of reference rate) –9 – 811 802 837
VALUE OF NEW BUSINESS contributions from free surplus and required capital sum up to the new business strain of CHF –127 million (2010: CHF –124 million). This represents the shareholders’ share in acquisition expenses for new business. The VIF-component of CHF 277 million (2010: CHF 333 million) is the value of future profits from new business.
EXPECTED EXISTING BUSINESS CONTRIBUTION (REFERENCE RATE) shows the unwinding of discount on all value of in-force components with reference rates as at start of year. Additionally the notional interest on the net asset value is included.
EXPECTED EXISTING BUSINESS CONTRIBUTION (IN EXCESS OF REFERENCE RATE) represents the additional contribution to MCEV by taking into account investment returns for the reporting period expected at the beginning of the period over and above the initial reference rates for the period. Also, releases from the period’s contribution to the time value of financial options and guarantees and cost of residual non-hedgeable risks are included. The expected business contribution is explained to a large extent by spreads expected to be earned on the corporate bond and real estate portfolio.
ASSUMPTION CHANGES refer to the impact of the change on assumptions such as future expense, surrender, mortality, morbidity, longevity rates. The overall positive contribution results from very positive persistency experience, predominantly for Swiss group business, positive expense variances due to a further reduced cost base and slightly adverse demographic assumptions.
ECONOMIC VARIANCES represent the change in embedded value by replacing the starting economic scenarios by the closing ones. Effects from deviations between actual and expected investment returns are included here. Higher swaption implied volatilities and lower reference rates led to a decrease of the MCEV. This was alleviated by the move to a QIS 5-styled parameterisation of the extrapolation of swap curves and a respective setting of positive liquidity premiums.
Economic 100 bp increase of interest rates (reference rates) 283 5% 29 19%
100 bp decrease of interest rates (reference rates) –729 –14% –75 –50%
–1 887 tory accounting rather than on IFRS. Therefore local balance sheets and profit and loss accounts are the starting point for the projections. The net asset value (of assets not backing liabilities) is based on the local balance sheet, but adjusted at market value.
Swiss Life — Financial Statements 2011 3 Information by Market Unit 3.1 MARKET UNITS
Swiss Life’s covered business is subdivided according to market units as follows: – Life, pension and assumed external reinsurance business in Switzerland – All businesses in France, mainly life, health and pension business – Life and pension business in Germany – Life and pension business in Luxembourg, Liechtenstein, and Singapore (together referred to as International)
FRANCE — Insurance products include savings, annuity, and risk products as well as health insurance products. New business for life insurance focuses on multi-support products, combining traditional savings and unit-linked components. The main distribution channels are brokers, tied agents and own sales force. Additionally, France has developed strong relations with independent financial advisors and private banks.
INTERNATIONAL — Swiss Life offers private placement life insurance (PPLI) through its carriers in Liechtenstein, Singapore and Luxembourg. In Luxembourg, Swiss Life also provides group insurance solutions for international and local corporate clients through Corporate Solutions.
Frictional costs of required capital –207 –91 –37 –18 –354 1 The value for France includes CHF 81 million in goodwill and intangible assets orginating from the non-life and non-health insurance operations.
Time value of financial options and guarantees –1 407 –315 –180 –10 –1 912
SWITZERLAND — The increase in net asset value and free surplus is a consequence of the strong annual profit of 2011 and non-recurring items. The time value of financial options and guarantees increased due to increased interest rate volatilities.
Hybrid debt, all of which is allocated to Switzerland, includes the difference between the market value of assets covering the hybrid debt in the statutory balance sheet and the marked-to-model value of the hybrid debt as described in section 4.3. This difference was allocated to the net asset value in 2010 and is allocated to the value of in-force business in 2011.
The negative free surplus of CHF –56 million is explained by not taking into account the goodwill relating to a past acquisition in Liechtenstein. The low TVOG reflects the absence of substantial financial options and guarantees across most business lines of International and a de-risking of the asset allocation in Corporate Solutions.
VALUE OF NEW BUSINESS BY MARKET UNIT – PREMIUMS AND MARGINS FOR THE YEAR 2011
New business annual premium equivalent (APE) 307 530 150 283 1 269 1 New business strain represents the effect on the net asset value from writing new business.
New business annual premium equivalent (APE) 306 592 163 426 1 486 1 New business strain represents the effect on the net asset value from writing new business.
SWITZERLAND — New business consists of new contracts and new coverages on existing contracts. Within group life business, replacements and newly insured persons entering existing group life contracts are not accounted for as new business.
An increase in new business volume of modern products in individual life and single premiums in group life was partly offset by lower production for traditional products in individual life and assumed re-insurance business. The decline in value of new business and new business margin is caused by the low level of risk-free interest rates in combination with high interest rate volatilities and the level of interest rate guarantees. The strongly adverse impacts from the financial market environment could not fully be counteracted by positive operating impacts from re-pricing measures for individual life products, successfully launched new pension products and favourable persistency and expense assumption variances in group life.
FRANCE — The new business margin increased due to management actions such as pushing unit-linked and risk business, de-risking the strategic asset allocation and efficiency gains. These actions offset the negative capital market environment as well as the overall volume reduction and increased the new business margin.
The value of new business for the health business increased significantly compared to 2010 as a consequence of the increase of volumes and the higher share of death and disability business sold. In life business, a higher share and volume of unit linked business than in 2010 was achieved.
INTERNATIONAL — The PPLI business is the main driver for the value of new business of International which accounts for CHF 30 million. The change in value compared to 2010 can be attributed to the performance of the PPLI business, where the reorientation in private banking led to a weakened demand and lower new business volumes. Pricing pressure and lower persistency assumptions reduced the margin by 20 bp. Because of the weight of PPLI within International, by far the biggest share of new business premiums consists of single premiums.
Expected existing business contribution (reference rate) 3 8 1 3 14
Closing adjustments are almost fully due to capital transfers to the Swiss market unit.
GERMANY — The operating MCEV earnings of CHF 46 million correspond to 8% of the adjusted opening MCEV. Besides the strong new business contribution, operating expense reductions also contributed positively. This was offset by ongoing investments into new asset management and policy administration systems as well as other measures to strengthen the sustainability of the business.
Experience variances and other operating variances are positively influenced by mortality and disability, while strong negative effects arise from the situation of the PPLI business, which still shows some characteristics of a start-up.
Swiss Life — Financial Statements 2011 4 Methodology 4.1 MCEV COMPONENTS FOR COVERED BUSINESS
The net asset value is calculated as the statutory equity capital, adjusted by the unrealised gains or losses on assets covering the equity capital that are attributable to shareholders after taxes. Depending on local regulatory restrictions, equalisation reserves are also included in the net asset value. Intangible assets are not accounted for in the net asset value.
VALUE OF IN-FORCE BUSINESS (VIF) — The value of in-force business consists of the following components: 1. Certainty equivalent value (CEV) 2. Time value of financial options and guarantees (TVOG), including the cost of credit risk (see below) 3. Cost of residual non-hedgeable risks (CNHR) 4. Frictional costs of required capital (FC)
The initial capital for the CNHR has been calculated in line with Swiss Life’s internal model. The corresponding economic capital is calculated by aggregating the stand-alone economic capital amounts that correspond to non-hedgeable risk factors, notably the following: – mortality – longevity – disability/morbidity – recovery rates – capital options – lapses – expenses
New business is defined as covered business arising from the sale of new contracts and from new covers to existing contracts during the reporting year, including cash flows arising from the projected renewal of those new contracts. Higher premiums in Swiss group life contracts from wage increases are not considered new business. The value of new business (VNB) reflects the additional value to shareholders created through the activity of writing new business during the reporting period.
A “stand-alone” valuation for value of new business has been performed when the business in force is not affected by writing new business (for example for unit-linked contracts). In this case, the value of new business has been valued independently of the business in force.
Equities, real estate, participations and alternative investments (hedge funds and private equities) are modelled separately using appropriate indices for the corresponding currencies.
When a substantial share of the assets is held in foreign currencies, these foreign assets are modelled explicitly (including the foreign currency exchange risk).
HYBRID DEBT — In accordance with the MCEV Principles (G3.4), hybrid debt allocated to covered business is valued by discounting the corresponding coupon and nominal payments (liability cash flows) with reference interest rates and spreads that would be used by capital markets for debt with similar characteristics. For the spread used for the closing MCEV see section 5.1.1. The approach is consistent with the fair value disclosed in the Notes to the Consolidated Financial Statements. For the opening MCEV and previous MCEV disclosures no spread was assumed.
Since the assets and liabilities within the Swiss Life Group are mostly denominated in Swiss francs, euro or US dollars, the economic scenarios reflect these three economies in a market consistent way. The exchange rates and dividend yields are modelled as additional risk factors, as well as the inflation rates in each economy.
Anticipated dynamic management actions and policyholder behaviour mainly concern the following areas: profit sharing for participating life businesses, asset allocation and realisation of gains and losses, and assumed policyholder behaviour with regards to their contractual options. They are dependent on the economic scenario considered and reflect local regulations and type of business.
The look-through principle is applied for the asset management services, corporate centre services and services related to intellectual property management such as branding. The future profits or losses taken into account for these are limited to those linked to the insurance business, after “legal quote” and taxes.
Covered business comprises all of Swiss Life’s major life, health and pension business as well as assumed external reinsurance with the exception of Swiss Life Insurance Solutions AG, which is not material for MCEV purposes. In the case of France, the remaining operations are sub-consolidated with their IFRS net asset value and also included in the French covered business.
The costs of share-based payment programmes for employees are not included in the MCEV, other than to the extent that they are allowed for in the local statutory accounts upon which the shareholder net assets are based. Further information on the costs of share-based payment programmes is given in the Group’s IFRS financial statements.
Swiss Life — Financial Statements 2011 3 Copyright © 2011 Markit Group Limited 5 Assumptions 5.1 ECONOMIC ASSUMPTIONS
5.1.1 REFERENCE RATES — Following market practice, the reference rates used for the calculation of the MCEV 2011 are based on the swap rates as at 31 December 2011 and include, where appropriate, a liquidity premium. Extrapolation of the interest curves and determination of liquidity premiums closely follow the QIS 5 framework.
The underlying liquidity premium is determined by applying the formula Maximum (0; 50%*(corporate credit spread over swap –40 bp)), where the corporate spreads over swap are measured with appropriate market indices. For the corporate credit spread over swap rates for the two currencies euro and US dollar, we use the quotation from Markit©3 instead of using the two step approach as described in the QIS 5 guidance. For the spread over swap rates for Swiss franc we use a SIX Swiss Exchange Bond Index (SBI® Corporate, introduced in 2011) composed of investment grade, foreign and domestic corporate issues in Swiss franc.
As some of Swiss Life’s liabilities are running longer than asset durations are available on financial markets in sufficient depth and liquidity, an extrapolation of yields is needed to assess swap maturities beyond this horizon. In 2011, Swiss Life used the approach for extrapolation prescribed by EIOPA for QIS 5.
The whole yield curve is shifted for the 100 bp increase/decrease in reference rate sensitivity including the extrapolated part beyond terms where market data is used for calibration of the reference rates.
The spread (on swap rates) applied for valuation of the hybrid debt as at 31 December 2011 is 363 bp. For the opening MCEV no spread was assumed.
Economy 1 year option 2 year option 5 year option 10 year option 15 year option 30 year option 5.1.2.2 SWAPTION IMPLIED VOLATILITIES AS AT 31 DECEMBER 2010
5.1.2.4 PROPERTY VOLATILITIES USED FOR THE CALCULATION AS AT 31 DECEMBER 2011 AND 31 DECEMBER 2010
5.1.3 CORRELATION ASSUMPTIONS — The correlation assumptions between different asset classes are based on historical market data. The correlations between returns on equities and on 10-year zero coupon bonds are assumed to be 13% for 2011 and 16% for 2010.
5.1.4 INFLATION ASSUMPTIONS — The inflation assumptions have been derived from inflation-linked bond prices, where inflation-linked bonds are traded. For the Swiss economy, the real interest rate model is calibrated on the inflation forecast by Consensus Economics, an international economic survey organisation.
Economy 1 year 2 year 5 year 10 year 15 year 30 year 5.1.5 REAL WORLD ASSUMPTIONS — These assumptions are used for the step “expected business contribution in excess of reference rates” introduced in 2011.
To the Board of Directors of Swiss Life Holding Limited Zurich
COST OF RESIDUAL NON-HEDGEABLE RISKS (CNHR) — The cost of residual non-hedgeable risks accounts for risk factors such as mortality, morbidity, expenses and lapse rates.
MARKET CONSISTENT EMBEDDED VALUE (MCEV) — Market consistent embedded value is a measure of the consolidated value of shareholders’ interests in the in-force covered business of the Swiss Life Group.
NON-TRADITIONAL BUSINESS — Unit-linked-type contracts, with or without additional financial guarantees and policyholder options.
QIS 5 — EIOPA’s fifth quantitative impact study for Solvency II.
TIME VALUE OF FINANCIAL OPTIONS AND GUARANTEES (TVOG) — The TVOG represents the additional market price of those financial options and guarantees in excess of the intrinsic value of options and guarantees which is already allowed for in the certainty equivalent value.
VALUE OF IN-FORCE BUSINESS (VIF) — The value of in-force business represents the net present value of future profits emerging from operations and assets backing liabilities, after accounting for TVOG, CNHR and FC.
Consolidated Financial Statements 72 Consolidated Statement of Income 73 Consolidated Statement of Comprehensive Income 74 Consolidated Balance Sheet 76 Consolidated Statement of Cash Flows 78 Consolidated Statement of Changes in Equity 79 Notes to the Consolidated Financial Statements 79 1 General Information 79 2 Summary of Significant Accounting Policies 79 2.1 Basis of preparation 79 2.2 Changes in accounting policies 80 2.3 Consolidation principles 81 2.4 Foreign currency translation and transactions 81 2.5 Cash and cash equivalents 82 2.7 Financial assets 84 2.8 Impairment of financial assets 85 2.9 Investment property 85 2.10 Insurance operations 90 2.11 Property and equipment 90 2.13 Investment management 90 2.14 Commission income and expense 91 2.15 Intangible assets 93 2.16 Impairment of non-financial assets 93 2.17 Income taxes 93 2.18 Assets held for sale and associated liabilities 93 2.19 Discontinued operations 94 2.20 Financial liabilities 94 2.21 Employee benefits 95 2.22 Provisions and contingent liabilities 95 2.23 Treasury shares 95 2.24 Earnings per share 96 2.26 Forthcoming changes in accounting policies 98 3 Critical Accounting Estimates and Judgements in Applying Accounting Policies 102 4 Segment Information 109 5 Risk Management Policies and Procedures 109 5.1 Contracts for the account and risk of the Swiss Life Group’s customers 110 5.2 Risk budgeting and limit setting 111 5.3 Asset and liability management (ALM) 112 5.4 Financial risk management objectives and policies 124 5.5 Insurance risk management objectives and policies
Swiss Life — Financial Statements 2011 131 6 Earnings per Share 132 7 Premiums, Policy Fees and Deposits Received 133 8 Details of Certain Items in the Consolidated Statement of Income 138 10 Financial Assets and Liabilities at Fair Value through Profit or Loss 139 11 Financial Assets Available for Sale 139 12 Financial Assets Pledged as Collateral 140 13 Loans and Receivables 141 14 Financial Assets Held to Maturity 142 15 Investment Property 142 16 Investments in Associates 143 17 Property and Equipment 144 18 Intangible Assets including Intangible Insurance Assets 147 19 Other Assets and Liabilities 148 20 Investment Contracts 151 22 Other Financial Liabilities 152 23 Insurance Liabilities and Reinsurance Assets 154 24 Employee Benefits 159 25 Income Taxes 165 28 Capital Management 166 29 Acquisitions and Disposals of Subsidiaries 167 30 Assets Held for Sale and Associated Liabilities 168 31 Acquisition of Insurance Portfolio 168 32 Related Party Transactions 170 33 Fair Value of Financial Instruments 173 34 Guarantees and Commitments 175 36 Future Minimum Lease Payments under Non-Cancellable Operating Leases – Lessor 176 37 Scope of Consolidation 182 Report of the Statutory Auditor
Total net comprehensive income attributable to equity holders of Swiss Life Holding 1 869 261 non-controlling interests 1 –4
Net cash flows from financial instruments at fair value through profit or loss 397 266 financial assets available for sale –4 945 –11 984 financial assets held to maturity 127 92 investment property –833 –997 other operating assets and liabilities –26 2
Acquisitions of subsidiaries, net of cash and cash equivalents 29 –9 –
Total change in cash and cash equivalents –2 020 –1 192
CASH AND CASH EQUIVALENTS AS AT END OF PERIOD 5 084 6 940
Cash and cash equivalents for the account and risk of the Swiss Life Group’s customers 2 446 2 333
Purchases of treasury shares – – –9 – – – –9 – –9
Sales of treasury shares – –1 2 – – – 1 – 1
Capital contributions from non-controlling interests – – – – – – – 1 1
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2010
Convertible debt, reclassification of equity component – –56 – – – 56 – – –
In November 2009, an amendment to IFRIC 14 Prepayments of a Minimum Funding Requirement was issued. The amendment applies in the limited circumstances when an entity is subject to minimum funding requirements and makes an early payment of contributions to cover those requirements. The amendment permits an entity to recognise the benefit of such an early payment as an asset. The Interpretation has been effective for annual periods beginning on or after 1 January 2011. The Swiss Life Group is currently not affected by the amendment.
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 in which Swiss Life Holding owns directly or indirectly more than 50% of the voting rights, or in which it otherwise has the power to exercise control over operations. Subsidiaries are consolidated from the date on which effective control is obtained. All intercompany balances, transactions and unrealised gains and losses on such transactions have been eliminated. A listing of the Group’s subsidiaries is set out in note 37. The financial effect of acquisitions and disposals of subsidiaries is shown in note 29. Associates for which the Group has between 20% and 50% of the voting rights and/or exercises significant influence are accounted for using the equity method. The Group’s share of net income for the year is recognised as a share of results of associates and the ownership interest in the investment is recorded in the balance sheet at an amount that reflects its share of the net assets. The Group’s share of net income is included from the date on which significant influence begins until the date on which significant influence ceases. Unrealised gains arising from transactions with associates are eliminated to the extent of the Group’s interest. Unrealised losses are eliminated unless the transaction provides evidence of an impairment of the asset transferred. The carrying amount includes goodwill on the acquisition. A listing of the Group’s principal associates is shown in note 16.
Non-controlling interest is the part of profit or loss and net assets of a subsidiary attributable to equity interest that is not owned, directly or indirectly, through subsidiaries by the parent. The amount of non-controlling interest comprises the proportion of the net fair value of the identifiable assets, liabilities and contingent liabilities not attributable, directly or indirectly, to the parent at the date of the original acquisition, goodwill attributable to non-controlling interest, if any, and the proportion of changes in equity not attributable, directly or indirectly, to the parent since the date of acquisition.
The Group enters into forward contracts, futures, forward rate agreements, currency and interest rate swaps, options and other derivative financial instruments for hedging risk exposures or for trading purposes. The notional amounts
Hedges of net investments in foreign operations (net investment hedges) are accounted for similarly to cash flow hedges, i.e. the effective portion of the gain or loss on the hedging instrument is recognised directly in equity and any ineffective protion is recognised immediately in the income statement. The gains or losses recognised in equity are reclassified to the income statement on the disposal of the foreign operation.
“Regular way” purchases and sales of financial assets are recorded on the trade date. The amortisation of premiums and discounts on investments is computed using the effective interest method and is recognised in income as an
Swiss Life — Financial Statements 2011 adjustment of yield. Dividends are recorded as revenue on the ex-dividend date. Interest income is recognised on an accrual basis.
FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS (FVPL) — Financial assets at fair value through profit or loss comprise financial assets held for trading and financial assets designated as at fair value through profit or loss. Financial assets which the Group buys with the intention to resell in the near term are classified as held for trading. Financial assets designated as at fair value through profit or loss are irrevocably designated as such when initially recognised. Financial assets are primarily designated as at fair value through profit or loss in the following instances: – Financial assets backing insurance liabilities and liabilities arising from investment contracts for the account and risk of the Swiss Life Group’s customers (contracts with unit-linked features, separate accounts, private placement life insurance) in order to avoid measurement inconsistencies with the corresponding liabilities.
Interest, dividend income and realised and unrealised gains and losses are included in net gains/losses on financial instruments at fair value through profit or loss.
FINANCIAL ASSETS HELD TO MATURITY (HTM) — Financial assets which the Group has the ability and positive intent to hold to maturity are carried at amortised cost using the effective interest method.
A financial asset or a group of financial assets is impaired and impairment losses are incurred if, and only if, there is objective evidence of impairment as a result of one or more events that occurred after the initial recognition of the asset (a “loss event”) and that loss event (or events) has an impact on the estimated future cash flows of the financial asset or group of financial assets that can be reliably estimated. Held-to-maturity 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. If there is objective evidence that an impairment loss on loans and receivables or held-to-maturity investments carried at amortised cost 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 the income statement. If a loan or held-to-maturity investment has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract.
DEFINITION OF INSURANCE CONTRACTS — Insurance contracts are contracts under which one party accepts significant insurance risk from another party (the policyholder) by agreeing to compensate the policyholder if a specified uncertain future event adversely affects the policyholder. Significant insurance risk exists if an insured event could
NON-DISCRETIONARY PARTICIPATION FEATURES — Certain policyholder participation systems do not satisfy the criteria for discretionary participation features. These policyholder bonuses might be guaranteed elements. Some policyholder bonuses are based on benchmark interest rates which are credited to the policyholders. For certain products,
INCOME AND RELATED EXPENSES FROM INSURANCE CONTRACTS AND INVESTMENT CONTRACTS WITH DIS-
FUTURE LIFE POLICYHOLDER BENEFIT LIABILITIES — These liabilities are determined by using the net-level-premium method. Depending on the type of profit participation, the calculations are based on various actuarial assumptions as to mortality, interest rates, investment returns, expenses and persistency, including a margin for adverse deviation. The assumptions are initially set at contract issue and are locked in except for deficiency.
These methods are continually reviewed and updated. Claim reserves are not discounted except for claims with determinable and fixed payment terms.
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 included in financial liabilities designated as at fair value through profit or loss (“unbundling of deposit components”). The components of the unit-linked liabilities that cover insurance risk, if any, are carried under insurance liabilities.
Assets associated with separate account/unit-linked contracts and private placement life insurance are included in financial assets designated as at fair value through profit or loss, investment property, derivatives and cash and cash equivalents. The related income and gains and losses are included in the income statement under the respective line items. The Group has allocated on a rational basis the proportion of acquisition costs related to the insurance and deposit components, respectively. The accounting policy for deferred acquisition costs applies to the portion of acquisition costs associated with the insurance component and the policy for deferred origination costs applies to the other portion (see 2.15 Intangible Assets).
PRESENT VALUE OF FUTURE PROFITS (PVP) ARISING FROM ACQUIRED INSURANCE CONTRACTS AND INVESTMENT
PVP is amortised in proportion to gross profits or gross margins over the effective life of the acquired contracts, which generally ranges from 20 to 30 years. Realised gains/losses are thereby taken into account as well as gains/losses recognised directly in equity (unrealised gains/losses). If these unrealised gains/losses were to be realised, the gross profits or gross margins used to amortise PVP would be affected. Therefore, an adjustment relating to these unrealised gains/losses is recognised in equity and is also reflected in the amount of PVP in the balance sheet (“shadow accounting ”).
GOODWILL — The Group’s acquisitions of other companies are accounted for under the acquisition method. Goodwill acquired prior to 1995 was charged directly to equity.
For the purpose of impairment testing, goodwill is allocated to cash-generating units. Goodwill is tested annually for impairment and carried at cost less accumulated impairment losses. Impairment losses on goodwill are not reversed in subsequent periods.
BRANDS AND OTHER — Other intangible assets consist of trademarks, computer software and other.
FINANCIAL LIABILITIES AT FAIR VALUE THROUGH PROFIT OR LOSS — Financial liabilities at fair value are irrevocably designated as at fair value at initial recognition. Financial liabilities are designated as at fair value through profit or loss in the following instances: – Financial liabilities for the account and risk of the Swiss Life Group’s customers where the insurance benefits are linked to unit values of investment funds or relate to private placement life insurance.
The assets of these plans are generally held separately from the Group’s general assets in trustee-administered funds. Defined benefit plan contributions are based upon regulatory requirements and/or plan terms. The Group’s defined
Swiss Life — Financial Statements 2011 benefit obligations and the related service costs are determined at each balance sheet date by a qualified actuary, using the Projected Unit Credit Method.
Insurance contracts issued to a defined benefit pension plan covering own employees have generally been eliminated. However, certain assets relating to these plans qualify as plan assets and are therefore not eliminated.
SHARE-BASED PAYMENTS — The Group operates equity-settled, share-based compensation plans. The fair value of the employee services received in exchange for the grant of the shares is recognised in income with a corresponding increase in equity. As the fair value of the services received cannot reliably be measured, the value is measured by reference to the fair value of the equity instruments granted and the price the employees are required to pay.
Basic earnings per share are calculated by dividing net income available to shareholders by the weighted average number of shares in issue during the reporting period, excluding the average number of shares purchased by the Group and held as treasury shares.
In May 2011, the International Accounting Standards Board issued IFRS 13 Fair Value Measurement which contains new guidance on fair value measurement and disclosure requirements for International Financial Reporting Standards. The requirements do not extend the use of fair value accounting, but provide guidance how it should be applied where its use is already required or permitted by other standards within IFRS. The new guidance will be effective for annual periods beginning on or after 1 January 2013. The Swiss Life Group is currently analysing the impact of these new requirements.
The following amended Standards and Interpretations are not relevant to the Swiss Life Group: – IFRIC 20 Stripping Costs in the Production Phase of a Surface Mine – IFRS 1 First-time Adoption of International Financial Reporting Standards – Severe hyperinflation and removal of fixed dates – IFRS 1 First-time Adoption of International Financial Reporting Standards – Amendment relating to the cost of an investment on first-time adoption and amendment to the retrospective application of IFRS for first-time adopters – IFRS 1 First-time Adoption of International Financial Reporting Standards – Limited exemption from comparative
The principal methods and assumptions used by the Group in estimating the fair value of the following financial instruments are as follows: – Fair values for debt and equity securities are generally based upon quoted prices in active markets, if available. These inputs to the fair value measurement are generally categorised as level 1 within the fair value hierarchy. In inactive markets, information about prices from recent transactions with the same or similar instruments, quotes from brokers, indices and other input are taken into consideration in the determination of fair values. A market is deemed no longer active if prices available do not represent regularly occurring market transactions on an arm’s length basis. Furthermore, the volume of trading activity has declined significantly and bid/ask spreads have widened above a certain level.
Swiss Life — Financial Statements 2011 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 responsibility for determining the fair values lies exclusively with the general partner in the partnership. 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.
– The fair value of investment contracts, which are carried at fair value, is measured using market-consistent, risk-neutral economic option price models, i.e. Monte Carlo simulations based on scenarios of capital market variables (share price and interest rate indices, interest rates and foreign currency rates). These inputs to fair value measurements are generally categorised as level 2 within the fair value hierarchy.
As a Group policy, held-to-maturity and 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.
At each balance sheet date, an assessment is made whether there is objective evidence that an available-for-sale equity instrument is impaired. A significant or prolonged decline in the fair value of the security below its cost is considered objective evidence of impairment. In this respect, a decline of 30% or more is regarded as significant, and a period of 12 months or longer is considered to be prolonged.
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, estimates of future deaths, surrender, exercise of policyholder options, investment returns and administrative 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 each year in order to determine whether the values of the liabilities so established are adequate in the light of these latest estimates. If the valuation of the liabilities is deemed adequate the assumptions are not altered. However, if the valuation of the liabilities is deemed inadequate, the assumptions underlying the valuation of the liabilities are altered (“unlocked”) to reflect the latest estimates; no margin is added to the assumptions in this event.
Swiss Life — Financial Statements 2011 considered, whereas increased mortality is also taken into account in group life business. In the individual life business, disability tables are usually reviewed every five years when new statistics from the Swiss Insurance Association become available.
POLICYHOLDER OPTIONS — Policyholders are typically offered products which include options such as the right to terminate the contract early or to convert the accumulated funds into a life annuity at maturity. In case of early termination the policyholder receives a specified surrender value or a value which varies in response to the change in financial variables such as an equity price or an index. In the case of the conversion option, the policyholder has the right to convert an assured sum into a fixed life annuity. The option values typically depend on both biometric assumptions and market variables such as interest rates or the value of the assets backing the liabilities. In certain countries and markets policyholder behavioural assumptions are based on own company records. The assumptions vary by product type and policy duration.
Operating segments are components of an entity about which separate financial information is available that is evaluated regularly by management in deciding how to allocate resources and in assessing performance.
The reportable segments have been identified based on information about the components of the entity that management uses to make decisions about operating matters.
The insurance segments primarily consist of life insurance operations. These operations offer a broad range of life, pension, annuity and investment-type policies to both groups and individuals, including disability coverage. The Group’s strategy focuses primarily on life and pensions in Switzerland, France and Germany and on cross-border business from Liechtenstein, Luxembourg, Austria, Singapore and Dubai. The insurance segments also include a number of companies which hold investments primarily pertaining to life insurance.
Non-life operations involve operations in France and Luxembourg and mainly include property and casualty, liability and motor insurance, accident and health insurance, and payment protection insurance. These operations are included in the segments “Insurance France” and “Other”.
Premiums ceded to reinsurers –33 –283 –22 –7 – – –17 –362 171 –191
Policy fees earned on investment and unit-linked contracts 45 108 20 83 – – – 256 – 256
Net gains/losses on investment property 399 105 9 – – – 0 513 – 513
Benefits and claims under investment contracts with discretionary participation –696 –13 – – – – – –709 – –709
Benefits and claims recovered from reinsurers 19 221 6 1 – – 0 247 –144 103
Employee benefits expense –268 –187 –81 –55 –101 –105 –7 –804 0 –804
Impairment of property and equipment and intangible assets –6 – –2 – – –3 – –11 – –11
Borrowing costs –129 0 –5 –6 – – –9 –149 29 –120
Share of results of associates 1 3 0 – 0 – 2 6 – 6
Policy fees earned on insurance contracts 16 25 – 0 – – – 41 – 41
Policy fees earned on investment and unit-linked contracts 31 120 20 86 – – – 257 – 257
Net gains/losses on financial assets –4 636 41 200 37 –1 –5 –66 -4430 – –4 430
Net gains/losses on financial instruments at fair value through profit or loss 4 185 25 51 –36 – 0 25 4250 – 4 250
Net gains/losses on investment property 200 108 –2 – – – 0 306 – 306
Benefits and claims under insurance contracts –8 095 –2 188 –1 974 –23 – – –15 –12 295 6 –12 289
Benefits and claims under investment contracts with discretionary participation –528 –15 – – – – – –543 – –543
Benefits and claims recovered from reinsurers 14 103 5 2 – – 10 134 –6 128
Net insurance benefits and claims –8 609 –2 100 –1 969 –21 – – –5 –12 704 0 –12 704
Interest expense –91 –183 –20 –16 0 –2 –1 –313 2 –311
Employee benefits expense –251 –188 –94 –60 –90 –118 –13 –814 –2 –816
Borrowing costs –107 0 –5 –6 – – –14 –132 28 –104
Financial assets pledged as collateral 279 781 – – – – – 1 060 – 1 060
Intangible assets including intangible insurance assets 929 491 1 287 188 0 1 083 4 3 982 – 3 982
Financial liabilities at fair value through profit or loss 1 228 312 417 15 614 – – – 17 571 – 17 571
No revenue from transactions with a single external customer amounted to 10% or more of the Group’s revenue.
Swiss Life — Financial Statements 2011 5 Risk Management Policies and Procedures
5.1 CONTRACTS FOR THE ACCOUNT AND RISK OF THE SWISS LIFE GROUP’S CUSTOMERS
The assets relating to certain life insurance and investment contracts are managed for the account and risk of the Swiss Life Group’s customers (separate account/unit-linked contracts, private placement life insurance). They are segregated and managed to meet specific investment objectives of the policyholders. The assets back the insurance liabilities and the financial liabilities arising from these contracts. The fair values of the liabilities reflect the fair values of the assets. Certain contracts with unit-linking features contain financial and insurance guarantees. The liabilities relating to this part are included in the financial and insurance liabilities.
The assets and liabilities from separate account/unit-linked contracts and private placement life insurance are generally excluded from the Swiss Life Group’s financial risk management considerations to the extent that the risks are borne by the customers.
TOTAL ASSETS FOR THE ACCOUNT AND RISK OF THE SWISS LIFE GROUP’S CUSTOMERS 22 346 21 275
TOTAL LIABILITIES LINKED TO ASSETS FOR THE ACCOUNT AND RISK OF THE SWISS LIFE GROUP’S CUSTOMERS 22 152 21 008
Net gains/losses on financial assets 8 515 –4 465 35 35 550 –4 430
COMPLIANCE WITH EXTERNAL CONSTRAINTS — Aspects other than the purely economic view must also be considered in the ALM process, such as regulatory requirements including statutory minimum distribution ratios (“legal quote”), funding ratios, solvency, local accounting rules and International Financial Reporting Standards, liquidity requirements and rating targets. Some of these views may lead to results that are not aligned with the economic approach, but nevertheless need to be taken into account.
STRATEGIC ASSET ALLOCATION — Defining the strategic asset allocation is the first major task of the ALM process and aims at achieving an efficient risk capital allocation, i.e. optimising the returns on the asset portfolio for the available risk capital defined within the risk budgeting process, taking into account all known constraints.
DISTRIBUTION POLICY — The distribution policy seeks to align the interests of the different groups of stakeholders. Holders of traditional life insurance policies favour a guaranteed minimum interest rate coupled with regular and appropriate discretionary participation whereas shareholders place greater emphasis on returns commensurate with the level of risk they are exposed to. The focus of the Swiss Life Group lies on the sustainability of the business model and should balance the policyholders’ and shareholders’ expectations.
PRODUCT DESIGN — The targets of risk management are supported by product design principles. Product design defines which guarantees and benefits are built into a specific product to respond to the demand from and expectations of customers. The actuarial bases used for this purpose should ensure that each individual product generates a sufficient contribution margin. To ensure that the Group’s principles are observed, guidelines on product management and underwriting have been introduced to harmonise the local guidelines and to ensure that they are in line with the guidelines of the Group. As the Group’s insurance entities operate in a number of different countries, the local regulatory constraints may have an impact on the business units’ product range. These constraints must always be obeyed.
The Group is exposed to financial risk through its financial assets, financial liabilities (primarily investment contracts and borrowings), reinsurance assets and insurance liabilities. In particular, the key financial risk is that the proceeds from the financial assets are not sufficient to fund the obligations arising from the insurance and investment contracts, as well as from borrowings and other liabilities. The most important components of the financial risk are interest rate risk, equity price risk, credit risk, currency risk and liquidity risk.
INTEREST RATE RISK RELATING TO FINANCIAL INSTRUMENTS 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 contract holders is insufficient to fund the guaranteed benefits and expected discretionary participation payable to them.
Insurance liabilities linked to assets for the account and risk of the Swiss Life Group’s customers 1 108
Insurance liabilities linked to assets for the account and risk of the Swiss Life Group’s customers 961
To reduce the credit exposure relating to derivatives a collateral management process has been established. Contractually all outstanding positions must be fully collateralised if they reach a very low agreed minimum transfer amount. The collateral is called at least weekly, but in times of turbulent markets the frequency is increased. As leverage is not permitted, certain coverage rules apply with regard to cash or long positions. Counterparties for derivative transactions, over-the-counter and exchange-traded, have to be approved by both the Group Chief Risk Officer and the Group Chief Investment Officer. The minimum rating for a counterparty is A– (Standard & Poor’s or equivalent) for the Swiss Life Group’s insurance operations. During the ongoing period of market turmoil reliance on ratings is of limited value; therefore an additional qualitative and quantitative counterparty monitoring process has been established to allow for immediate proactive measures.
Swiss Life — Financial Statements 2011 and itself underlies the collateral management process described above. The credit default swap index is a hedge on credit risk of a basket of counterparties and is an exchange-traded derivative.
Debt securities available for sale 64 883 53 908 – – 64 883 53 908
Debt securities held to maturity 5 046 5 229 – – 5 046 5 229
Secured by netting agreements – 90 – – – – 90
EXPOSURE TO CREDIT RISK OF DEBT INSTRUMENTS – CREDIT RATING BY CLASS AS AT 31 DECEMBER 2011
Policy and other originated loans 153 126 377 20 – 276 1 953
Policy and other originated loans 7 8 –7 –7 0 1
FINANCIAL ASSETS INDIVIDUALLY DETERMINED AS IMPAIRED – IMPAIRMENT LOSS ALLOWANCE FOR THE YEAR 2011
FINANCIAL ASSETS INDIVIDUALLY DETERMINED AS IMPAIRED – IMPAIRMENT LOSS ALLOWANCE FOR THE YEAR 2010
Balance as at losses Write-offs translation Balance as at 1 January recognised and disposals differences end of period
The balance sheet currency exposure is to a large extent hedged using foreign currency derivatives. The following table shows the Group’s foreign currency exposure against the major functional currencies Swiss franc and euro: CURRENCY EXPOSURE AS AT 31 DECEMBER 2011
Entities with functional currency CHF – –12 595 –13 490 –3 169 –100 –2 211
Entities with functional currency EUR – – –906 –111 – –207
Entities with functional currency EUR 8 – 446 55 0 154
Entities with functional currency EUR – – –564 – – –180
LIQUIDITY RISK — Liquidity risk is the risk that not enough cash resources may be available to pay obligations when due (primarily obligations arising from the insurance business and debt) at a reasonable cost. The Swiss Life Group is exposed to liquidity risk which primarily arises on calls on its cash resources from claims, amounts payable at maturity and surrenders arising from insurance and investment contracts. The Swiss Life Group faces the risk of not being able to refinance its debt obligations due to unexpected long-term market disruptions.
At strategic level, the Swiss Life Group holds substantial liquidity and uses active debt maturity planning to ensure full financial flexibility and efficient liquidity management.
Carrying More than amount Up to 1 month 1–3 months 3–12 months 1–5 years 5–10 years 10 years
Investment contracts with discretionary participation 8 445 24 43 235 1 937 1 904 4 302
Investment contracts with discretionary participation 8 314 25 45 241 1 925 1 952 4 127
Investment contracts without discretionary participation 177 0 26 102 22 11 17
Financial assets at fair value through profit or loss 2 235 2 381 1 985 2 072 19 900 18 942 24 120 23 395
Financial assets held to maturity 174 178 4 872 5 051 – – 5 046 5 229
Current income tax assets 2 10 – – – – 2 10
Deferred income tax assets – – 153 150 – – 153 150
Liabilities associated with assets held for sale 15 – – – – – 15 –
Financial liabilities at fair value through profit or loss 566 312 – – 18 216 17 259 18 782 17 571
Swiss Life — Financial Statements 2011 equivalent 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 a specific investment and risk committee or senior management. Contracts exceeding the set limits must be tested for profitability according to predefined procedures before approval. Certain contracts which include specific risks relating to derivatives or demographic 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, it must be ensured that the underwriting practices are in line with local laws.
At end of year of loss occurrence 437 445 435 396 496 448 362 408 337 329 n/a 9 years later 357 – – – – – – – – – n/a
Cumulative payments to date –324 –314 –247 –236 –245 –226 –218 –234 –225 –123 –2 392
The development of claims under non-life insurance contracts comprises the non-life business in France. Garantie Assistance S.A., Paris, is no longer included in the figures above due to the reclassification to assets held for sale and associated liabilities in 2011.
REINSURANCE — Reinsurance is used to limit the Group’s exposure to insurance risk. This does not, however, discharge the Group’s liability as a primary insurer, and, if a reinsurer fails to pay a claim, the Group remains liable for the payments to the policyholder. A loss allowance would be recognised for any estimated unrecoverable reinsurance.
Swiss Life — Financial Statements 2011 1 Copyright © Stichting CFO Forum Foundation 2008
As far as property and casualty insurance is concerned, the reinsurance arrangements mostly include non-proportional coverage on any single risk and/or event, and are adapted to the specific exposure. This includes excess of loss, stoploss and catastrophe coverage, as well as facultative reinsurance for protection against specific risks.
Approximately 1.6% in terms of earned insurance premiums was ceded as at 31 December 2011 (2010: 1.9%).
The market consistent embedded value of the Swiss Life Group amounted to CHF 7.7 billion as at 31 December 2011 (2010: CHF 7.6 billion). Due to different valuation principles, changes in the embedded value are typically not reflected to the same extent in the consolidated balance sheet and consolidated statement of income of the Swiss Life Group and vice versa.
At 31 December 2011, if the interest rates had been 100 basis points lower, the embedded value would have been CHF 729 million lower (2010: CHF 824 million lower).
At 31 December 2011, if the swaption implied volatilities (interest rates) had been 25% higher, the embedded value would have been CHF 709 million lower (2010: CHF 247 million lower).
At 31 December 2011, if the swaption implied volatilities (interest rates) had been 25% lower, the embedded value would have been CHF 544 million higher (2010: CHF 397 million higher).
At 31 December 2011, if the market value of equity securities and property had been 10% higher, the embedded value would have been CHF 746 million higher (2010: CHF 723 million higher).
At 31 December 2011, if the equity securities and property implied volatilities had been 25% lower, the embedded value would have been CHF 200 million higher (2010: CHF 227 million higher).
At 31 December 2011, if the euro had strengthened by 10% against the Swiss franc, the embedded value of the foreign life and health insurance companies would have been CHF 251 million higher (2010: CHF 254 million higher).
BASIC EARNINGS PER SHARE FOR THE NET RESULT ATTRIBUTABLE TO EQUITY HOLDERS OF SWISS LIFE HOLDING (IN CHF) 18.97 17.46
Weighted average number of shares outstanding 31 893 573 31 904 887
Impairment losses on debt securities available for sale 27 –57 4 equity securities available for sale 27 –87 –68 loans and receivables 13 –4 –9
NET GAINS/LOSSES ON FINANCIAL INSTRUMENTS AT FAIR VALUE THROUGH PROFIT OR LOSS
Financial assets designated as at fair value through profit or loss –155 57
Financial liabilities designated as at fair value through profit or loss 30 11
Net benefits and claims under insurance contracts 11 905 12 161
Net gains/losses on financial instruments at fair value through profit or loss include interest and dividend income of CHF 79 million for the period ended 31 December 2011 (2010: CHF 48 million). Net gains/losses on liabilities designated as at fair value through profit or loss include changes attributable to credit risk: nil for the period ended 31 December 2011 (2010: nil).
Derivatives designated as fair value hedges 0 11 2 3 117 822
Derivatives designated as net investment hedges 6 29 – – 365 374
TOTAL DERIVATIVES DESIGNATED AS CASH FLOW HEDGES 239 63 175 0 –2 6 497 n/a n/a
In 2011 and 2010, the Group entered into a forward contract to hedge EUR 300 million of the investment in AWD Holding.
Assets for the account and risk of the Swiss Life Group’s customers 5 19 900 18 942
TOTAL FINANCIAL LIABILITIES AT FAIR VALUE THROUGH PROFIT OR LOSS 18 782 17 571
Swiss Life — Financial Statements 2011 11 Financial Assets Available for Sale
In CHF million Cost/amortised cost Net unrealised gains/losses Fair value (carrying amount)
TOTAL FINANCIAL ASSETS AVAILABLE FOR SALE 63 038 56 808 4 226 1 142 67 264 57 950
Financial assets that have been sold under a repurchase agreement or lent under an agreement to return them, are not derecognised when substantially all the risks and rewards of ownership are retained by Swiss Life. If the transferee has the right to sell or repledge the financial assets given as collateral, they are reclassified in the balance sheet as financial assets pledged at their respective carrying amounts.
Debt securities previously classified as available for sale 7 976 8 831 –31 –47 7 945 8 784
BALANCE AS AT END OF PERIOD 53 70 9 9 62 79
Interest income accrued on impaired loans was CHF 1 million as at 31 December 2011 (2010: CHF 1 million). The Group’s loan portfolio is monitored closely through the review of information such as debt service, annual reports and assessments. This information is evaluated in light of current economic conditions and other factors such as diversification of the property portfolio. This evaluation is part of the regular review to determine whether the allowance
Swiss Life — Financial Statements 2011 for potential loan losses is warranted. Management believes that the allowance for loan losses is sufficient. However, management cannot predict with assurance the impact of future economic circumstances or how the mortgage and real estate portfolios would be affected by various economic circumstances.
Gains/losses that would have been recognised in equity if the assets had not been reclassified (excluding adjustments for income tax and policyholder participation) –58 564
TOTAL FINANCIAL ASSETS HELD TO MATURITY 33 5 046 5 229 – – 5 046 5 229
Financial assets held to maturity that have been sold under a repurchase agreement or lent under an agreement to return them, and where the transferee has the right to sell or repledge the financial assets given as collateral, were reclassified to financial assets pledged as collateral.
Classification as assets held for sale and other disposals 0 –2
Reclassifications and transfers to investment property 15 5 – – –3 2
BALANCE AS AT END OF PERIOD –201 –35 –34 –9 –279
Revaluation in respect of transfers to investment property 3 – – – 3
BALANCE AS AT END OF PERIOD 720 61 48 8 837
Effect of shadow accounting 0 0 –139 –32 – – –139 –32
Foreign currency translation differences 0 –3 –31 –217 0 –3 –31 –223
BALANCE AS AT END OF PERIOD 15 16 1 743 1 986 59 31 1 817 2 033
Classification as assets held for sale and other disposals – – – 0 –8 –10 –8 –10
Foreign currency translation differences –27 –202 –7 –54 –6 –42 –40 –298
BALANCE AS AT END OF PERIOD –157 –157 –112 –83 –100 –102 –369 –342
TOTAL OTHER INTANGIBLE ASSETS AS AT END OF PERIOD 1 570 1 588 199 233 136 128 1 905 1 949
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 acquisitions of subsidiaries is included in intangible assets. Goodwill on associates is included in the carrying amount of the investment.
The calculations relating to the recoverable amounts, which have been determined on a value-in-use basis, use cash flow projections based on financial budgets approved by management. The projection covers a four-year period for Lloyd Continental. Due to the duration of the insurance and investment contracts a five-year period was used for CapitalLeben. The calculations for Lloyd Continental and CapitalLeben are based on present values that traditionally use a single set of estimated cash flows and a single discount rate.
Net carrying amount of goodwill 81 81 258 265 774 794
In 2011, the model used for the calculation of the recoverable amount of AWD has been refined and the discount rate has been adjusted to reflect lower interest rates, the current financing structure and the specific business model of AWD (i.e. 9.4%). No impairment loss of the goodwill allocated to the “AWD” segment would have been caused were the same discount rate to have been applied as for the Swiss Life insurance businesses in Germany (i.e. 10.5%). The headroom by which the recoverable amount exceeded the carrying amount of AWD amounted to approx. CHF 270 million as at 31 December 2011. If AWD were to achieve an annual growth rate on operating earnings before interest and taxes of approx. 6% over the next five years, the recoverable amount would equal the carrying amount as at 31 December 2011.
BRANDS AND OTHER — Consists of brands, trademarks, computer software and other intangible assets relating to AWD CHF 98 million (2010: CHF 103 million) and other CHF 38 million (2010: CHF 25 million) as at 31 December 2011.
Investment contracts with discretionary participation with actuarial valuation 1 463 1 179
Investment contracts without discretionary participation at amortised cost 33 53 170
Effect of changes in actuarial assumptions and other movements 0 2
Amounts in CHF million (if not noted otherwise) Nominal value Nominal value Optional Carrying Carrying in year of issue at 31.12.2011 Interest rate Year of issue redemption amount amount
Swiss Life AG 1 EUR 700 EUR 590 5.849% 2007 2017 715 733
Swiss Life AG 2 EUR 350 EUR 343 5.000% 2005 2015 412 421
Swiss Life AG EUR 100 – +1.750% 2001 2011 – 125
Swiss Life AG EUR 215 EUR 15 +2.050% 1999 2014 19 19 1 Hybrid loan notes granted by ELM B.V. 2 Hybrid bank loan originally granted by J.P. Morgan Bank Luxembourg S.A.
Claims under non-life insurance contracts 960 998 196 203 764 795
TOTAL INSURANCE LIABILITIES AND REINSURANCE ASSETS 93 365 90 305 380 365 92 985 89 940 of which for the account and risk of the Swiss Life Group’s customers 1 108 961 – – 1 108 961
Additions from acquisition of insurance portfolio 31 146 – 12 – 134 –
Effect of changes in actuarial assumptions and other movements –69 89 –2 –2 –67 91
BALANCE AS AT END OF PERIOD 6 332 6 274 92 66 6 240 6 208
Additions from acquisition of insurance portfolio 31 1 459 – – – 1 459 –
Foreign currency translation differences –528 –3 771 –1 –12 –527 –3 759
BALANCE AS AT END OF PERIOD 80 172 77 173 92 95 80 080 77 078
Insurance liabilities linked to assets for the account and risk of the Swiss Life Group’s customers 1 108 961 24 Employee Benefits
Employee benefit liabilities consist of gross defined benefit liabilities 1 173 1 965 other long-term employee benefit liabilities 0 0 other employee benefit liabilities 88 84
In September 2010, the Swiss Life Group announced an amendment of the terms of two major defined benefit plans in Switzerland. The amendments mainly relate to old-age pension benefits that changed from benefit-oriented to contribution-oriented, changes in the level of certain long-term death and disability benefits, and to a reduction in benefits for early retirements. The curtailment gain in 2010 amounted to CHF 39 million. In January 2011, CHF 684 million in cash was transferred from the Swiss Life Group to these defined benefit plans. This amount is included in the contribution by the employer. The investment risks are now borne by the plan participants themselves whereas mortality and disability risks are still reinsured with the Swiss Life Group.
Amount of insurance contracts not included in plan assets 1 393 2 137
Present value of defined benefit obligation –2 646 –2 370 –2 385 –2 292 –2 320
The liability for long-term employee benefits amounted to CHF 0.3 million as at 31 December 2011 (2010: CHF 0.1 million ). It relates to part-time employment contracts prior to retirement and to profit-sharing arrangements for certain employees.
For 2008, 2009 and 2010, a share-based payment programme was established which gives the members of the Corporate Executive Board and other senior management members of the Swiss Life Group the right to receive a certain number of Swiss Life Holding shares (performance share units, PSUs) after three years of service if certain conditions are fulfilled. The number of the shares allocated depends on two criteria. One criterion is the performance of the share price of the Swiss Life Holding share during the vesting period of three years. The other criterion is the performance of the share price of the Swiss Life Holding share during the vesting period of three years compared to the performance of the Dow Jones STOXX 600 Insurance Index. For the PSUs issued in 2010, a maximum possible factor of 2.0 applies. For the PSUs issued in 2008 and 2009, the maximum possible factor is 1.5. No minimum possible factor is applied in 2008, 2009 and 2010 so that the number of PSUs could drop to zero after three years.
In 2011, the number of RSUs granted under this programme amounted to 68 730. The fair value at the measurement date amounted to CHF 140.05. The date of grant was 1 April 2011.
Number of restricted share units Balance as at Employee Balance as at 1 January Issued departures Vested end of period
The expected weighted-average tax rate for the Group was 26.5% in 2011 (2010: 26.7%). 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: RECONCILIATION OF INCOME TAX EXPENSE
In 2011, the Swiss Life Group realised a tax benefit of CHF 90 million due to the final assessment of the disposal of business activities in prior periods.
NET DEFERRED INCOME TAX ASSETS/LIABILITIES –671 39 –343 –15 –1 –991
Deferred 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 foreign entities are controlled by the Group and these earnings are not expected to be repatriated in the foreseeable future. The amount of such temporary differences was approximately CHF 4.4 billion as at 31 December 2011. If such earnings are ever repatriated, no material tax liabilities would be incurred due to participation exemption rules, unrecognised tax loss carryforwards and applicable double taxation treaties.
Deferred 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 tax asset has been recognised: UNRECOGNISED TAX LOSSES
Unused amounts reversed during the reporting period –1 –10 –11 –17
As at 31 December 2011, the share capital of SLH consisted of 32 081 054 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. As at 31 December 2010 SLH had 32 081 054 registered shares with a par value of CHF 9.60 per share. Conditional share capital was CHF 12 032 868.60 as at 31 December 2011
Gains/losses recognised directly in equity comprise fair value changes of available-for-sale investments, unrealised losses on financial assets reclassified from available for sale to loans due to the disappearance of an active market, revaluation surpluses on the transfer of owner-occupied property to investment property and the effective portion of the gain or loss on hedging derivatives in qualifying cash flow hedges. These amounts are net of certain policyholder bonuses and other policyholder liabilities, deferred acquisition costs, deferred income taxes and non-controlling interests.
Net balance as at 1 January –762 369 2 –162 209
Gains/losses arising during the period –80 3 360 – – 3 360
Hedging gains/losses arising during the period 9 9 – 175 – 175
Transfer in respect of assets classified as held for sale – 0 – 0 –
Gains/losses transferred to the income statement 8, 9 – –200 –2 109 –93
Effects of shadow accounting – –70 –27 –44 –141 income tax 0 –281 –45 –17 –343 foreign currency translation differences – 0 0 –1 –1
Revaluation surplus on investment property 17 – – – 3 3
Effects of policyholder participation – –355 – –133 –488 shadow accounting – –62 – 36 –26 income tax –1 –35 0 –25 –60 disposals of subsidiaries 0 – – – –
NET BALANCE AS AT END OF PERIOD –762 369 2 –162 209
The gains/losses transferred to the income statement of CHF 109 million in 2011 (2010: CHF 232 million) shown in “Other” relate to financial assets reclassified to loans in 2008.
The assets and associated liabilities of the French non-life operation Garantie Assistance S.A., Paris, have been reclassified as held for sale. The sale is expected to be completed in 2012. Garantie Assistance S.A., Paris, is presented in the “Insurance France” segment.
Financial assets available for sale 14 – – – 14 –
TOTAL ASSETS HELD FOR SALE 22 – – 94 22 94
TOTAL LIABILITIES ASSOCIATED WITH ASSETS HELD FOR SALE 15 – – – 15 –
In April 2011, the Swiss Life Group acquired the group life insurance portfolio of Nationale Suisse. The assets acquired and liabilities assumed were as follows: In CHF million
In 2011, Swiss Life AG, AWD Holding and its subsidiaries paid a total of EUR 0.3 million (2010: EUR 0.045 million) in consulting fees for services provided by a company in which Carsten Maschmeyer, member of the Board of Directors of Swiss Life Holding until 7 December 2011, has an important shareholding. Additionally, revenue of EUR 0.09 million (2010: EUR 0.2 million) and expenses of EUR 0.2 million (2010: EUR 0.2 million) were incurred by AWD Holding and its subsidiaries in relation to Carsten Maschmeyer and companies in which he has an important shareholding. All transactions were at arm’s length.
Equity securities at fair value through profit or loss 2 147 139 28 2 314
Equity securities available for sale 1 139 484 758 2 381
Debt securities available for sale 52 301 1 595 12 53 908
The fair value of financial instruments that are not traded in an active market is determined using valuation techniques. If all significant inputs to these valuation techniques are observable (directly and indirectly) in the market, the financial instruments are included in level 2.
Total gains/losses recognised directly in equity – – 0 – –1 –
Total gains/losses recognised in the income statement are presented in net gains/losses on financial assets – – –1 – 49 –
FINANCIAL ASSETS MEASURED AT FAIR VALUE BASED ON LEVEL 3 FOR THE YEAR 2010
Total gains/losses recognised directly in equity – – –49 – –187 –
BALANCE AS AT END OF PERIOD – 194 12 13 812 284
Financial assets held to maturity 5 046 5 229 5 369 5 099
Later than 1 year and not later than 5 years 17 10
Private equity commitments represent unfunded commitments to make investments in direct private equity or private equity 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.
The Group has entered into various operating leases as a lessee. Rental expenses recognised in income for these items totalled CHF 42 million for the year ended 31 December 2011 (2010: CHF 43 million). Minimum lease payments totalled CHF 42 million in 2011 (2010: CHF 43 million).
Contractual obligations for repairs and maintenance of investment property amounted to CHF 69 million as at 31 December 2011, which are included in this line item (2010: CHF 60 million).
of which can be sold or repledged by transferee 969 1 060
Securities under repurchase agreements, securities borrowing and lending arrangements 93 –
GENBLAN AG, Zürich Ins. CH from 31.05.2011 100.0% 100.0% CHF 17 628
Long Term Strategy AG in liquidation, Zug Other until 21.01.2010 – –
Oscar Weber Holding AG, Zürich Ins. CH 100.0% 100.0% CHF 50
Swiss Life Capital Holding AG, Zürich Other 100.0% 100.0% CHF 5 514
Swiss Life Holding AG, Zürich Other – – CHF 163 613
Swiss Life Intellectual Property Management AG, Zürich Other 100.0% 100.0% CHF 250
Swiss Life International Services AG, Schaan, Branch Zürich (formerly Swiss Life (Liechtenstein) Services AG, Schaan, Branch Zürich), Zürich Ins. Int. 100.0% 100.0% – –
Swiss Life Pension Services AG, Zürich Ins. CH 100.0% 100.0% CHF 250
Swiss Life Products (Luxembourg) S.A., Strassen, Branch Zürich, Zürich Ins. Int. 100.0% 100.0% – –
1 Segment (Ins. CH = Insurance Switzerland, IM = Investment Management, Ins. Int. = Insurance International, Ins. FR = Insurance France, Ins. DE = Insurance Germany)
Swiss Life (Liechtenstein) AG, Schaan Ins. Int. 100.0% 100.0% CHF 5 000
Swiss Life International Services AG (formerly Swiss Life (Liechtenstein) Services AG), Schaan Ins. Int. 100.0% 100.0% CHF 100
Swiss Life Gestion Privée, Paris Ins. FR 60.0% 100.0% EUR 205
Swiss Life Prestigimmo, Paris Ins. FR 99.9% 100.0% EUR 2 340
Bizztools GmbH, Bremen AWD 100.0% 100.0% EUR 50 1 Segment (Ins. CH = Insurance Switzerland, IM = Investment Management, Ins. Int. = Insurance International, Ins. FR = Insurance France, Ins. DE = Insurance Germany)
Faircompare GmbH (formerly AWD Vermögensverwaltungsgesellschaft mbH), Hannover AWD 100.0% 100.0% EUR 100
Financial Solutions AG Service & Vermittlung, München Other 100.0% 100.0% EUR 200
SL Beteiligungs-GmbH & Co. Immobilien II KG, München Ins. DE 100.0% 100.0% EUR 10
SL Beteiligungs-GmbH & Co. Immobilien III KG, München Ins. DE 100.0% 100.0% EUR 10
SL Private Equity GmbH, Frankfurt am Main Ins. DE 98.9% 98.9% EUR 91
Swiss Life Assurance Solutions S.A., Branch Germany, München Other from 29.06.2010 100.0% 100.0% – –
Swiss Life Deutschland Holding GmbH, München Ins. DE from 11.08.2011 100.0% 100.0% EUR 50
Swiss Life International Pension Fund ASBL, Strassen Ins. Int. – – – –
Swiss Life Participations Luxembourg S.A., Strassen Other 100.0% 100.0% EUR 75 198
Swiss Life Products (Luxembourg) S.A., Strassen Ins. Int. 100.0% 100.0% EUR 79 031
Swiss Life Solutions S.A., Strassen Other 100.0% 100.0% EUR 22 450 1 Segment (Ins. CH = Insurance Switzerland, IM = Investment Management, Ins. Int. = Insurance International, Ins. FR = Insurance France, Ins. DE = Insurance Germany)
AWD Chase de Vere Corporate Services Limited, Manchester AWD until 29.03.2011 – –
Chase de Vere Financial Solutions Limited, Manchester AWD 100.0% 100.0% GBP 10
Adroit Partnerships (Offshore) L.P., Grand Cayman Ins. CH 100.0% 100.0% CHF 6 580
Swiss Life Insurance Finance Ltd., Grand Cayman Other 100.0% 100.0% EUR 5 1 Segment (Ins. CH = Insurance Switzerland, IM = Investment Management, Ins. Int. = Insurance International, Ins. FR = Insurance France, Ins. DE = Insurance Germany)
Swiss Life Insurance Solutions AG, Branch Italy, Milano Other from 28.01.2010 100.0% 100.0% – –
AWD Romania Broker de Asigurare Srl, Târgu Mureş AWD 100.0% 100.0% RON 50
Swiss Life Private Placement (Middle East) Limited, Dubai Ins. Int. 100.0% 100.0% USD 8 100 1 Segment (Ins. CH = Insurance Switzerland, IM = Investment Management, Ins. Int. = Insurance International, Ins. FR = Insurance France, Ins. DE = Insurance Germany)
As statutory auditor, we have audited the consolidated financial statements of Swiss Life Holding Ltd, which comprise the consolidated statement of income, consolidated statement of comprehensive income, consolidated balance sheet, consolidated statement of cash flows, consolidated statement of changes in equity and notes to the consolidated financial statements (pages 72 to 181), for the year ended 31 December 2011.
In our opinion, the consolidated financial statements for the year ended 31 December 2011 give a true and fair view of the financial position, the results of operations and the cash flows in accordance with the International Financial Reporting Standards (IFRS) and comply with Swiss law.
Ray Kunz Reto Zemp Audit expert Audit expert Auditor in charge
Total income improved significantly vis-à-vis the previous year, climbing from CHF 208 million to CHF 249 million. The additional income is chiefly derived from income and fees earned on loans and guarantees granted to subsidiaries in the previous year. In the year under review, a new loan for CHF 200 million was granted to Swiss Life Ltd, which will further increase future interest income. As a result of higher income tax, total expenditure rose by CHF 3 million to CHF 11 million.
Swiss Life Holding was financed exclusively by equity during the period under review; no interest was paid on borrowings.
Swiss Life Holding’s liquid assets (liquid funds, time deposits, and bonds and investments) amounted to CHF 615 million on 31 December 2011. Liquid funds and time deposits contracted slightly from CHF 306 million to CHF 279 million, while easily tradable bonds and capital-protected investments accounted for CHF 336 million at the end of the year. These share certificates are all eligible for repos and can generate liquidity at any time.
Swiss Life International Holding AG, Zürich CHF 1 000 100.00% CHF 1 000 100.00%
LOANS TO GROUP COMPANIES — CHF 362 million of the loans to Group companies is classified as subordinated.
TREASURY SHARES — In the year under review the companies in the Swiss Life Group purchased a total of 66 900 Swiss Life Holding shares at an average price of CHF 127.86. In the same period, they sold 473 shares at an average price of CHF 118.50. As at 31 December 2011, the Swiss Life Group held 224 330 treasury shares.
PERSONNEL EXPENSES — No direct staff costs are included under operating expenses.
Reserve for own shares (incl. reduction in par value) –7 7
DISCLOSURE OF COMPENSATION TO THE BOARD OF DIRECTORS AND THE CORPORATE EXECUTIVE BOARD IN
COMPENSATION POLICY PRINCIPLES — The Board of Directors as a whole is responsible for establishing guidelines on the Group’s compensation policy (incl. variable compensation and equity compensation plans) and on employee benefit institutions. The compensation policy underpins the performance culture required by the corporate strategy and forms part of the HR policy. The aim is to retain well-qualified employees and gain new, highly skilled staff. The compensation system is in line with the market environment and must be competitive. The individual overall compensation takes into account the employee’s professional skills, engagement and personal performance. It is made up of the basic salary, a variable bonus based on achievement of the annual objectives, which is generally paid in cash and possibly in shares, if applicable deferred compensation in cash and a mid- to long-term equity compensation plan, as well as contributions for occupational provisions and risk insurance. The salary is determined according to the employee’s function and skill set, and is annually reassessed and adjusted if appropriate. Salary comparison studies and recognised job evaluation systems are used to check appropriateness and to ensure internal and external comparability.
The share in the company’s success is measured using quantitative Group objectives (Key Performance Indicators, KPIs), which are defined in advance for a period of three years as part of medium-term planning. The main KPIs, besides the key figures relating to annual profit, costs, business volume, investment return, return on equity and solvency, are the profitability of in-force and new business, margin performance and the share of non-traditional products in new business. In order to avoid conduct aimed at the short-term achievement of key indicators with a higher weighting, the individual KPIs are not mechanistically weighted in advance; their individual weighting is determined by the Board of Directors at the end of each financial year.
PRACTICE AND PROCEDURE — 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 Nomination and Compensation Committee (NCC) is responsible for putting forward appropriate proposals. The Board of Directors as a whole also establishes the guidelines for the Group’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 Baloise Insurance, Swiss Re, Zurich Financial Services, Allianz and AXA.
COMPENSATION TO MEMBERS OF THE CORPORATE EXECUTIVE BOARD — Compensation remitted to members of the Corporate Executive Board comprises the basic salary, variable compensation in cash and other compensation (child allowances, company cars, premium contributions to 3rd pillar pension plans). The variable compensation in cash is allocated as a bonus and, if applicable, as deferred compensation in cash. The deferred compensation in cash, which was introduced on 1 January 2012, is paid out after a period of three years has elapsed and provided that the regulatory requirements have been satisfied. In addition, a mid- to long-term compensation component is in place in the form of an equity compensation plan (RSU plan) linked to the performance of the Swiss Life Holding share price. It gives an entitlement to Swiss Life Holding shares after a period of three years has elapsed and provided that the relevant requirements are satisfied at the time of allocation.
The variable compensation components are determined by the Board of Directors in accordance with the described compensation policy principles and based on the company result and the achievement of personal goals assessed in the employee appraisal procedure implemented throughout the Group (Group Performance System, GPS). The variable compensation in cash (bonus in cash and, if applicable, deferred compensation in cash) is set at a maximum of 117% of the fixed basic salary (“bonus cap”) and requires that all objectives have been considerably exceeded. The allocation of subscription rights to Swiss Life Holding shares (equity compensation plan, RSU plan) is also limited in value to 117% of the fixed basic salary; if deferred compensation in cash, which on its part is subject to the bonus cap mentioned above, is simultaneously allocated, the maximum limit is 64% of the fixed basic salary.
As a mid-to long-term compensation component linked to the performance of the Swiss Life Holding share price, an equity compensation plan has been in place since 2004 for members of the Corporate Executive Board and other key performers within the Swiss Life Group, who are determined by the Corporate Executive Board with the approval of the Nomination and Compensation Committee. Based on this plan, participants are granted future subscription rights to Swiss Life Holding shares free of charge after a period of three years has elapsed and provided that the requirements under the plan are satisfied at that point.
Pursuant to the regulations of the 2009 and 2010 equity compensation plans, future subscription rights were allocated in the form of Performance Share Units (PSUs), according to which share allocation after expiry of the three-year period was based on two objective performance criteria, each weighted at 50%. The first criterion is the Total Shareholder Return on the Swiss Life Holding share (TSR Swiss Life Holding), requiring a performance of over 20% for a subscription right to shares to arise after three years. The second criterion involves a comparison of the Swiss Life Holding share’s TSR with the TSRs of the shares of the companies included in the Dow Jones STOXX 600 Insurance
The attribution of mid- to long-term compensation components (RSU plan) is deferred for a period of three years from the date of allocation in the same way as the deferred compensation in cash. Likewise, the RSU plan provides for adjustment and reclaiming mechanisms (clawback) in the event of a negative impact of the key figures applying to the allocation of deferred compensation due to a restatement of the annual accounts or damage to Swiss Life as a result of a violation of statutory, regulatory or compliance standards. If the employment relationship is terminated by a participant during the three-year deferral period, the entitlements expire worthless.
PERSONNEL CHANGES TO THE BOARD OF DIRECTORS AND THE CORPORATE EXECUTIVE BOARD IN 2011 — There were two resignations from the Board of Directors in the period under review. After serving for eight years on the Board of Directors of Swiss Life Holding, Paul Embrechts did not stand for re-election at the General Meeting of Shareholders in 2011 and no longer serves on the Board of Directors. Carsten Maschmeyer, who was elected to the Board of Directors of Swiss Life Holding at the 2009 General Meeting of Shareholders, resigned as a member of the Board of Directors on 7 December 2011.
Amounts in CHF Compensation in Expenditure for Compensation in cash blocked shares4 occupational provisions
Total compensation Extrain cash ordinary Aggregate and shares Regular contri- total Amount Number Amount (amount)5 contributions6 butions (amount)
CHF 179 034 in the year under review. 6 Pursuant to the pension fund regulations, occupational provisions were financed by the employer and the employee at a ratio of 70% to 30%.
As part compen- and shares Total of basic sation for (amount) Extra-
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 CHF 139 793 in the year under review.
5 In the year under review, AWD Holding AG paid a total of EUR 44 625 in consulting fees for services provided to the AWD Group to a company in which the Board of Directors member Carsten Maschmeyer has an important shareholding.
COMPENSATION TO THE CORPORATE EXECUTIVE BOARD IN 2011 — The compensation table below shows the variable compensation in cash for the 2011 financial year which was determined by the Board of Directors at the beginning of 2012. It is disclosed on an accrual basis as compensation for 2011.
Other members of Corporate Executive Board 795 500 17 280 2 420 064 11 375 880 6 The deferred compensation in cash is paid out after a deferral period of three years, provided the requirements are satisfied at that point. 7 The RSUs represent future subscription rights that entitle the individuals concerned to receive Swiss Life Holding shares after a period of three years, provided the requirements are satisfied at that point.
The members of the Corporate Executive Board did not receive any compensation in shares for the 2010 financial year.
Bonus for 2010 Other compensation in cash and shares Salary paid in 20112 compensation3 in cash Number Amount (amount)
TOTAL CORPORATE EXECUTIVE BOARD 43 900 23 630 1 Total number of PSUs allocated in the years 2009 and 2010 in connection with the relevant equity compensation plan. The PSUs 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 then met.
SHARE OWNERSHIP/PARTICIPATION RIGHTS AS AT 31.12.2010 — As at the balance sheet date, acting members of the Board of Directors and the Corporate Executive Board (including closely related parties) held the following number of registered Swiss Life Holding shares and future subscription rights to Swiss Life Holding shares in the form of Performance Share Units (PSUs).
The net profit for the year amounts to CHF 237 856 634. The Board of Directors proposes to the General Meeting of Shareholders that the profit be appropriated in accordance with the table below. If this proposal is adopted, a distribution of CHF 4.50 per share will be made from the capital contribution reserve.
TOTAL PROFIT SHOWN IN THE BALANCE SHEET 241 650 317 203 793 683
The Business Review and the Financial Statements for 2011 can be found at: www.swisslife.com/report
Providing for the future, however, goes far beyond financial security. It reflects a person’s wishes and convictions. These individual perceptions of providing for the future form the subject of the photo editorial in this year’s Business Review: the editorial offers a colourful insight into the private or occupational, but invariably personal, pension and savings situation of nine people at different stages in life and in different circumstances.
The Swiss Life Group’s 2011 financial year at a glance: Course of business — Swiss Life increased its net profit by 8% from CHF 560 million in 2010 to CHF 606 million in 2011. The Group maintained its focus on profitability and grew in strategically important business areas. Compared with the previous year premium volume declined by 10% in local currency to CHF 17.1 billion; in its home market of Switzerland, however, it increased 6% to CHF 8.1 billion. In addition to an excellent investment result, Swiss Life achieved further operational advances and, by 2011, had already achieved the cost targets set for 2012.
Workforce — 7500 employees, accounting for about 7200 full-time positions, were working for the Swiss Life Group worldwide at the end of 2011.
Many ambitious measures launched under MILESTONE helped us to offset the adverse effects of the financial market crisis during the year under review. For instance we increased the share of modern risk and pension products in new business to 70%. We also strengthened our balance sheet, protected our new business margin and increased sales of Swiss Life products through AWD. Our cost discipline also proved a great success. By the end of 2011, Swiss Life had already made the planned savings of CHF 350-400 million announced in 2009. Costs were brought down by over CHF 400 million compared to 2008.
“We see the key to doing business successfully as never losing sight of our goal and our responsibility: the loyalty and security of our customers are the compass that we consistently turn to for guidance.”
Steady hard work, rather than spectacular advances, enabled Swiss Life to make further operational advances and again increase profits in 2011. Bruno Pfister, Group CEO, is committed to achieving profitable growth, but he is not counting on a financial market tailwind in the near future.
2011 was a turbulent year, both politically and economically. Yet Swiss Life still made a sizeable net profit. How was that possible? Of course the financial market uncertainty, the weak euro and volatile markets represented a huge challenge to everyone, including us. But when we launched our corporate MILESTONE programme in 2009, we had already set our course towards preserving our earnings power. We were right at the time not to assume our business would be buoyed by much of a tailwind. Of course we’ve not emerged completely unscathed from the problems of the last three years, but MILESTONE has enabled us to find the right answers to largely compensate for the prevailing adverse conditions.
What are the specific achievements of MILESTONE? Swiss Life has executed its MILESTONE plans in a disciplined manner. One example is our improved cost situation: Our ambitious cost management allowed us to achieve the cost savings announced in 2009 as early as the end of 2011. Swiss Life thus managed to reduce its costs by over CHF 400 million compared with 2008. This took a lot of hard work. I am proud of the operational progress we have made, which is ultimately thanks to the dedication and commitment of our employees. But MILESTONE was always more than just a cost-reduction programme to us. Our objective was to make our business model more resilient. For instance we increased the share of new business through modern risk and pension products to 70%, thereby again already achieving the target we set for 2012. Furthermore, we succeeded in growing in strategically important business areas.
“The volatile financial markets of recent years have shown corporate clients in Switzerland the true value of full insurance with Swiss Life. We’re seen as a safe haven.”
Swiss Life is reporting a strong investment result with net investment return of 3.8%. How was that possible with the financial markets as uncertain as they are? Our teams in Investment Management have done a fantastic job. The results reflect our exceptionally professional asset and liability management and the intrinsic value of our investment portfolio – our proven expertise in bonds and real estate, in particular, puts us in an advantageous position. It makes me very optimistic about the future development of our Group. We can continue to be a successful and reliable partner for our clients.
The uncertain times have resulted in increased demand from corporate clients in Switzerland for the full insurance model. Is this a correct assessment? The volatile financial markets of recent years have shown corporate clients in Switzerland the true value of full insurance with Swiss Life. We’re seen as a safe haven. Demand was just as strong in 2011. By contrast, many pension funds and banking solutions have shown themselves to be less secure and some are suffering from a shortfall – with all the associated disadvantages for employees and their employers. Our secure solutions make an important socio-political contribution to the stability of the pension system, which is something we need to protect.
“Our teams in Investment Management have done a fantastic job. The results reflect our exceptionally professional asset and liability management and the intrinsic value of our investment portfolio – our proven expertise in bonds and real estate, in particular, puts us in an advantageous position.”
You’re working on your plans for 2013 to 2015. When will you be announcing them? The achievement of our MILESTONE targets has top priority for us in 2012. Even if we wrap up MILESTONE as a programme this year, its cornerstones will remain part of our corporate DNA. We will continue to focus in the future on creating added value for the customer, while at the same time generating the required margins. It’s also our aim to further enhance the effectiveness of our various distribution channels and to improve the quality of our customer service within Swiss Life. We must also continue to enhance our efficiency in order to stay competitive. Our management teams are currently working on defining new goals and ambitions on the basis of what we have achieved in recent years. We will be presenting our plans and ideas to the public at this year’s Investors Day, to be held on 28 November 2012.
Everyone has their own way of providing for the future, whether for themselves, others or some greater goal. In its 2011 Business Review, Swiss Life shows different personal life choices and various ways of providing for the future, including saving to buy your first dog, taking a scientific approach to climate change and searching for salvation in the solitude of nature.
“My work as a glaciologist involves finding out about the water reserves contained in the glaciers. This enables me to create a scientific basis to enable Switzerland to equip itself to adapt to climate change.”
“I look after myself by listening to my heart and living at my own rhythm. I lead a simple life, focused on spirituality. I always try to remain aware of the transience of life in the here and now so I can progress along the path to enlightenment.”
“My master’s degree focused on peace and conflict research. During the course of my studies I learnt a lot about the fears and needs of our society. However, to go beyond a purely theoretical approach to conflict and risk, I am also involved with a humanitarian aid organisation. This means I am always ready to help should a catastrophe occur.”
NADINE SALZMANN, 36, LUCERNE✟ Nadine Salzmann, who was born in Lucerne, works as a senior scientist at Zurich and Freiburg universities. She studied physical geography and completed a doctorate on a regional climate model for alpine permafrost modelling. In order to better understand the processes high up in the mountains and draw conclusions about climate change, she has also conducted research in the Alps, the Peruvian Andes and the Rocky Mountains.
PIERRE CHÂTELET, 92, PARIS✟ Pierre Châtelet has five children, six grandchildren and four great-grandchildren. The 92-year-old retired engineer attributes his ability to outperform his younger sporting counterparts to his all-round healthy lifestyle. This consists of a balanced diet with seasonal fruit and vegetables, sleeping well and regular study.
SANDRO ERNÉ, 34, FRAUENFELD✟Sandro Erné, a Swiss accredited building site foreman and father, sees his own safety, and that of others, not only as a top priority but also as his duty. It is a duty he fulfils at work in his capacity as managing director of Beerli und Erné AG, a company specialising in roofing and façade work, as well as when working as an officer for
RABEA HASS, 28, BERLIN✟On completing her undergraduate studies in European cultural history, Rabea Hass did a Masters in peace and conflict research. She currently works as a research associate at Hertie School of Governance and her doctorate is about military reform in Germany. She also works voluntarily at the Federal Agency for Technical Relief, where she is in the management team for units sent to work overseas. She has been involved in relief operations in India and Kazakhstan and was in Japan following the catastrophic earthquake.
ESTHER ROESTI, 49, SOLOTHURN✟While employed as a dental hygienist, Esther Roesti was often involved in helping to treat children. She enjoyed this work a lot. A desire to work more closely with children led her to start her work with schools. Her enthusiasm for working with children seems to be hereditary: two of her three children have embarked on a teaching career.
MILESTONE — THE RIGHT ANSWER — Swiss Life launched the Group-wide revitalisation programme MILESTONE in 2009 in the aftermath of the financial crisis. The programme focuses on enhancing Swiss Life’s competitive position and increasing flexibility towards customers. Building on from the strategic thrusts, the company set itself the following goals to be achieved by 2012: 1. Promote modern and risk products and increase the value and profit margin of new business 2. Optimise multichannel distribution and fully exploit AWD’s potential as a distribution channel 3. Steadily pursue the costs target – to reduce the cost basis by CHF 350-400 million – and continuously strive for further improvements 4. Implement initiatives for optimising in-force business and risk capital.
The logo links the company’s tradition going back more than 150 years with its customers’ future. People with their different needs and their desire for financial security and independence stand at the centre of the life insurance and pensions business. The three lines in the Swiss Life logo symbolise the most prominent lines on the palm of a hand and represent the long-term and personal needs of customers.
The reversed sentences on the advertising boards caught the public’s interest. With a humorous take on the subject, the words used in the posters evoked images in the mind of the observer. The campaign spurred people to send in their own reversed sentences as part of a competition, which met with a resounding response. Between 100 and 150 contributions were submitted every day, producing a final total of over 8000 different examples plastering the virtual reversed sentences wall of the Swiss Life in Switzerland website. The campaign was awarded various international prizes, including two silvers at the Eurobest Awards, as well as a Grand Prix at the Epica Awards, a first for a Swiss campaign in 25 years.
In Germany, premium income declined by 6% to CHF 1.7 billion, attributable to lower single premiums from the capitalisation product, while periodic premium business increased by 3%. The Insurance International segment, where premium income originates largely from global business with high net worth individuals, recorded a currency-adjusted drop of 37% on the previous year to CHF 3 billion. AWD improved its sales revenues by 3% to EUR 561 million. In Investment Management total assets under management came to CHF 134.3 billion (+10%). This includes growth of CHF 4.3 billion in third-party assets. Insurance reserves totalled CHF 128.1 billion, which corresponds to 6% growth in local currency over the same period in the previous year.
In CHF million 1 Insurance Switzerland 2 Insurance France 3 Insurance Germany 4 Insurance International 5 Investment Management 6 AWD
Germany reported a segment result of CHF 47 million (2010: EUR 71 million), attributable to a lower financial result than in 2010 when measures to lengthen the duration of the investment portfolio had a positive impact. The Insurance International segment reduced its loss of the previous year from CHF 27 million to CHF 10 million. Investment Management increased its contribution to the Group result by 26% to CHF 130 million. AWD confirmed its successful reorganisation with adjusted operating profit of EUR 54 million (2010: EUR 49 million), improving its EBIT margin to 9.7% (2010: 9.0%). AWD’s operating result was affected, however, by EUR 47 million in provisions for legal cases.
Financial result (without share of results of associates) 4 459 4 368 2.1%
Swiss Life has a solid capital base. Shareholders’ equity stood at CHF 9.1 billion at the end of 2011, up 23% on the previous year’s figure of CHF 7.4 billion. The Group’s solvency ratio climbed to 213% at the end of the year (2010: 172%). Based on its internal model for the Swiss Solvency Test, Swiss Life is in the green zone.
The Group continued its drive towards profitable growth and grew in strategically important business areas. Gross written premiums, policy fees and deposits received for all segments stood at an overall figure for 2011 of CHF 17.1 billion, equivalent to a currency-adjusted decline of 10%.
Long-term initiatives, such as the continued reduction of risks on the investment side, the multichannel strategy implemented for distribution and the renewed sustained cost reduction made a major contribution to the solid result. The financial result increased to CHF 3 billion and direct investment income rose 4% to CHF 2.9 billion.
According to the Swiss Insurance Association (SIA) Swiss Life insurance premiums rose by 4% over the previous year to CHF 29.8 billion. Premiums in group insurance rose by 6% and in individual insurance fell by 0.4%. Swiss Life grew overall premium volume by 6% to CHF 8.1 billion. Occupational pension provision accounted for 81% of income, which was 2% higher than the previous year. Swiss Life’s market share of group insurance remained at 29.2%, and in individual insurance it was 19.8%. In the year under review, the sale of products through AWD (as measured on the basis of production volume) almost doubled reaching CHF 386 million.
The products launched in 2011 are a key driver of premium growth in own and third-party distribution channels: In individual insurance Swiss Life launched two
GROSS WRITTEN PREMIUMS, POLICY FEES AND DEPOSITS RECEIVED 8 123 7 631 6.4%
The French insurance market contracted by 8% at constant exchange rates, which was principally attributable to a 14% fall in savings and retirement provisions, whereas health, death and disability insurance, as well as property and casualty posted 8% and 4% growth respectively. At constant exchange rates, Swiss Life in France benefited from its market diversification, generating premium volume of CHF 4.4 billion (down by 6%). Although net inflows in savings and retirement provisions fell by 16%, the quality of premium income improved with the share of unit-linked contracts and of periodic premium contracts growing by 10% and 6% respectively. The share of unit-linked premiums was well above the market level (29% compared to 14% for the market), primarily due to the greater differentiation in the bonus distribution policy. In an extremely competitive market, health, death and disability insurance, as well as property and casualty grew by 8% and 6% respectively in local currency terms, attributable to rate changes and the writing of new business. Furthermore, Swiss Life Banque Privée again posted a positive result.
Net earned premiums and policy fees 2 374 2 724 –12.8%
GROSS WRITTEN PREMIUMS, POLICY FEES AND DEPOSITS RECEIVED 3 033 5 159 –41.2%
INVESTMENT MANAGEMENT — The Investment Management segment comprises Group-wide institutional asset management activities. At CHF 130 million, the 2011 result is CHF 27 million up on the previous year. This equates to an increase of 26%. Thanks to new business and positive market developments, assets under management increased by CHF 12 billion to over CHF 134 billion. Insurance assets climbed CHF 8 billion to almost CHF 118 billion. Factoring in an acquisition, assets invested in funds and third-party mandates grew by around CHF 4 billion. Thanks to a greater volume of assets under management, income rose by 12%. At the same time, expenses increased by 4% as a result of the above-mentioned acquisition.
AWD — The AWD Group posted an adjusted operating result of EUR 54 million (up EUR 5 million or 10% on the previous year). The company’s operating result (EBIT) was affected by one-off effects, primarily caused by reserves for potential client compensation payments and legal and process costs for AWD Austria and AWD Germany. As a result the AWD Group posted EBIT of EUR 7 million. Taking into account the charges related to the amortisation of acquired customer relationship assets, the segment result stands at CHF –13 million (2010: CHF +43 million ).
In the year under review, the AWD Group generated overall sales revenue of EUR 561 million (+3%). Commission income from new business rose by EUR 1 million to EUR 407 million. Sales of unit-linked products increased by 5% and those of life insurance and pension products went up 4%. Sales of investment funds together with property and accident insurance fell by 21% and 18% respectively, while private health insurance sales rose by 10%.
In the core market of Germany, sales revenues amounted to EUR 376 million (+7%). The local companies in Germany benefited from strong end-of-year business caused by the guaranteed interest rate reduction for life insurance scheduled for 2012. Restructuring of the business model in Austria was driven forward. After the consolidation of 2010/2011, AWD in the Austria and Eastern Europe region is being reorganised as a professional consulting organisation. The region posted sales revenue of EUR 64 million (–14%). AWD Switzerland generated revenue of EUR 72 million (–2%) in 2011. Sales revenue in the UK was further increased to EUR 49 million (+5%) in 2011, helped by the increase in the number of advisors to 208 (+5%).
The improvement in revenue for the AWD Group is partly attributable to a rise in advisor productivity (+5%). The efficiency of advisors in the AWD Group is also a consequence of the consistent quality of advisory services.
Swiss Life has developed a whole range of initiatives and activities throughout all its organisational units, which illustrate the active role the company plays within society. They are the proof of its sense of social responsibility.
Employees are the basis of Swiss Life’s success; the quality of the service it provides depends upon their expertise and commitment. The aim of human resources management is therefore to find the most suitable employees, to get them interested in working for Swiss Life, to retain them and systematically develop their skills. Swiss Life positions itself in the market as a responsible and attractive employer and promotes the engagement of its employees – both at work and in society.
The performance culture is translated by managers and employees through standardised processes. These include employee performance reviews, setting objectives, appraisals, training measures and decisions on salary and promotions. All employees throughout the Group have completed an individual objectives setting and assessment process. The required strategy- and value-oriented behaviour of employees is described and evaluated in the Group Competency Model (GCM).
In France, Swiss Life gave all of its employees an individual social balance sheet for the second time. This shows every employee what he/she personally receives from the employer as a combination of salary and non-pecuniary benefits. This personal social balance increases the employee’s identification with the employer.
The AWD Group continued in 2011 to drive forward the implementation and development of its new corporate mission statement. Every year the focus is on one dimension in particular, to support the consistent implementation and execution of the mission and vision. In the year under review this value was “professionalism”, following on from “team spirit” in 2010. In 2012 “customer orientation ” will be the focus theme.
PERSONAL ENGAGEMENT — Swiss Life employees go the extra mile — In 2011, Swiss Life conducted its new-style employee survey across the Group for the second time. This second survey was aimed at evaluating the initiatives and measures which were launched in the wake of the 2010 survey. As well as the achievement of these goals, employees assessed company-relevant subjects such as performance, customer orientation, innovation and change, as well as cooperation and management. The Group response rate was a very high 80%.
The Swiss Life Group engagement value is 59%. This is well above the average for companies in the European financial industry (52%). Both the response rate and the engagement value were significantly higher than in the last survey. The Group-wide engagement value alone increased by 3% compared with the previous year. This shows that Swiss Life employees demonstrate a high level of willingness to go the extra mile for their customers – a good prerequisite for keeping Swiss Life on course in the fiercely competitive life and pensions market.
A senior management programme (SMP) is in place at Swiss Life Group level for managers destined for senior management roles. Participants from all units work in a series of modules on the subjects of leadership, strategy and customer orientation, as well as financial management and presentation techniques, developing strategic projects for the Group. During the period under review, four international working groups worked on a series of topics. In 2011, 12 participants qualified from the Senior Manager Pool Class of 2009, while 13 future senior managers, including 4 women, commenced training in the Class of 2011.
Swiss Life in France is proactive in its response to demographic changes within society. The “55+” programme is aimed at safeguarding expertise within the company and sustaining employee performance. The initiative involves the obligation to reserve 12% of posts for the over 55s. “55+” allows a flexible reduction in working hours, with partial salary adjustment in the final year of work.
TRAINING AND DEVELOPMENT — Investment in employee development — Swiss Life places great value on internal and external employee training and development. Training and development focuses on management and specialist training for all employees, as well as on tailored courses covering social and methodological skills. Expenses for staff training and development within the Group in 2011 amounted to CHF 15.2 million – approximately CHF 2224 per employee. Expressed as a proportion of total personnel costs, the outlay for training and development came to 2.3%.
In the year under review, Swiss Life in Switzerland set up a programme for graduates of universities and colleges of higher education. The 18-month programme will commence in spring 2012. It complements Swiss Life’s existing training and development provisions for young talent. In the year under review, 21 young people qualified as specialists in three professions, and 12 trainees or interns gained work experience in the life insurance sector.
European financial sector 3 Swiss Life Group 2010 4 Swiss Life Group 2011
SOCIAL ENGAGEMENT — Helping people in need — All Swiss Life’s national companies and their employees support people in need and a range of meaningful projects.
In Switzerland the Perspectives Foundation funds domestic charitable initiatives in the fields of health, science, education, culture and sport, focusing on integration and education. Created on the occasion of Swiss Life’s 150th anniversary in 2005, the Perspectives Foundation donates more than CHF 1 million every year. In 2011 it supported 89 organisations and projects. The foundation also donated considerable sums to relief organisations offering emergency aid. In addition, Swiss Life’s sales force supported various local organisations.
AWD has been helping children in need since it created the AWD-Stiftung Kinderhilfe foundation in Germany in 1991, which the local AWD companies in Austria, Switzerland and the Czech Republic also support. The foundation is funded mainly by contributions from the salaries of AWD employees. The AWD-Stiftung Kinderhilfe foundation runs two large-scale operational projects of its own. The Noma project launched by the German AWDStiftung in Sokoto in West Africa is devoted to the surgical rehabilitation of victims of a disease caused by a mixed infection which results in severe facial disfigurement. In Kyrgyzstan, the Swiss AWD-Stiftung is building a treatment centre for children with facial malformations.
COMMUNITY SERVICE — Promoting and supporting voluntary work — Swiss Life is committed to the principle of voluntary public service. Voluntary public service means taking personal action in matters of public life, in effect unpaid work for the whole community. As a company operating in the social insurance area, Swiss Life has an interest in an integrated and well functioning society. An unpaid commitment in society and the private economy promotes a sense of community and public welfare and enhances social skills.
POLITICS — Swiss Life cultivates active dialogue with decision makers — Swiss Life regards the exchange of ideas with political bodies as extremely important. The company brings its expertise into political discussion and defends its interests in the public arena at all stages of the decision-making process. In this way it tries to exert influence throughout the whole political cycle, aiming for optimal and appropriate outcomes for all concerned. Through its specialists, Swiss Life advises the various decision makers in political parties, committees and parliamentary bodies, bringing its expert knowledge to bear at all stages from the drafting of legislation to the formal processes of consultation and approval. In addition, the company supports individual politicians and selected political parties with financial contributions. Swiss Life in Switzerland is in permanent contact with politicians of all parties, for example on occupational benefit issues (conversion rate, minimum interest rate, statutory minimum distribution ratio), as well as in relation to industryrelevant topics (solvency, supervision). Among other themes, the company is actively involved in the total revision of the Federal Law on Insurance Contracts (VVG).
In Germany, decision makers from the worlds of business, politics, academia and the media engaged in dialogue on key sociopolitical issues at the “Salon Palais Leopold” series of events in Munich. Guests in 2011 included the publicist, Avraham Primor, and the top Greek diplomat, Anastassios Kriekoukis. Since 2007, Swiss Life has provided a platform for dialogue at its Munich Specialist Forum series of events for corporate clients, business partners and experts.
Keenly aware of its responsibility to the environment, Swiss Life strives to conserve natural resources in a sustainable manner, thus helping to keep the environment intact. Since 1998, Swiss Life in Switzerland has been a member of the Energy Model Zurich and is thus committed to increasing the energy efficiency of its business premises in Zurich by at least 1.5% a year until 2012. The company again reached its target in 2011, lowering not only energy consumption and emissions, but also costs.
ECOLOGICAL BALANCE SHEET — Continuous monitoring of energy consumption and emissions — Since 2008, Swiss Life has produced an annual environmental data
Since 2006, Swiss Life in Switzerland has been using electricity exclusively from renewable energy sources. In this way, the company has been able to reduce its GHG emissions by about 1300 tonnes a year; the use of electricity by the business premises now produces almost no GHG emissions at all.
Swiss Life is fully confident that increased awareness of energy and materials consumption among employees can sustainably improve the ecological balance sheet. For this reason, it is pursuing initiatives throughout the Group aimed at reducing everyday consumption. In the year under review Swiss Life in Switzerland equipped all sanitary facilities in the main building and the Zurich offices with automatic water supply fittings. This is expected to produce savings in freshwater consumption of 600 000 litres and savings in heat consumption of 33 MWh.
Swiss Life in France launched an environmental information campaign in 2011 aimed at economical use of paper and office supplies. When properties were renovated, the environmentally relevant standards were exceeded. In addition, the national company joined the 10:10 project run by the environmental organisation Good Planet. The objective is to reduce the company’s CO2 output by 3% per year.
Swiss Life in Germany has been taking part in the climate protection programme “ECOPROFIT” since 2008. As a result of the measures taken, the company saves 91 000 kWh of electricity annually at its Munich location and has reduced its annual CO2 output by 58 tonnes. In December 2010 it was awarded the Munich ECOPROFIT company certificate for 2009/2010 (the second time it has won the award) for its exceptional commitment to corporate environmental protection. Since January 2010 Swiss Life in Germany has also been drawing electricity exclusively from renewable sources. As a result, its GHG emissions have fallen by about 1000 tonnes.
AWD undertakes constant improvement and renewal of its technical installations. The numerous measures implemented since 2001 have yielded energy savings of over 4.5 million kWh. In addition to its involvement with the Climate Alliance Hanover, AWD has been undergoing environmental audits since 2005 through its membership of the ECOPROFIT CLUB in Hanover.
In 2011 the Swiss Life Group again took part in the Carbon Disclosure Project (CDP), in which an independent, non-profit organisation conducts the world’s largest survey of corporate information on climate change. With the publication of its data, Swiss Life underlined its own aspirations to transparency and its position as one of the most transparent companies in Switzerland.
Prize winners The national competition run by Swiss Youth in science received 64 entries in 2011. 18 of them received the accolade “good”, 27 “very good” and 19 “excellent”. 23 entries were awarded a special prize.
PRODUCT STRATEGY — Swiss Life’s product strategy combines customer value and profitability. Regulators’ specifications, regarding solvency for example, and external factors, such as the economic environment and interest rates also need to be taken into consideration. Our efforts are geared towards the optimisation and further development of the existing offering within the customer, investor and regulator triangle, whereby our starting point and first priority is always the customer’s best interests. We also factor in economic realities to ensure security for our customers and investors. This leaves our customers secure in the knowledge that we will always be able to keep our promise “The future starts here.”
PRODUCT MIX AND PRODUCT DEVELOPMENT — Through the MILESTONE programme Swiss Life aims to generate a 70% share of new business through modern and risk products. This goal is also supported by Groupwide product management. This product management has a coordinating and strategic function, leaving the initiation and implementation of product development up to the market units. This ensures that Swiss Life’s products and services match the needs of the local market and its customers as closely as possible.
PROMOTING INNOVATIVENESS — Innovation and progress is a priority at Swiss Life. We want to identify opportunities and trends early so we can consistently offer our customers an optimal service. To achieve this goal, Swiss Life promotes an open and innovationfriendly corporate culture across the Group. Employees are motivated to come up with and present their own ideas.
DIGITAL FUTURE — In the year under review Swiss Life strengthened its presence within digital media channels. There is now an extensive range of online channels and platforms throughout the entire Swiss Life Group, as well as a presence on social media sites, such as Facebook and YouTube. Furthermore, the national companies have developed a range of applications for smartphones. In France, Swiss Life provides a pollen forecast for hay fever sufferers; in Switzerland you can calculate your premiums and tax savings using the calculator on your smartphone. In Germany, Swiss Life has its own platform to provide information for policyholders, which can also be used, for example, by brokers. Through its Group-wide digital strategy, launched in 2011, Swiss Life aims to intensify its activities in new media and provide more products and services online in future.
New Total Swiss Life in Switzerland 15 43 Swiss Life in France 21 31 Swiss Life in Germany 10 30 Swiss Life International 4 20
In 2011 Swiss Life launched 50 new products or products with increased customer value out of a total of 124 products in the market.
The Swiss Life Group is committed to implementing the recognised principles of responsible corporate conduct and continually adapts its corporate governance practices to current developments.
GROUP STRUCTURE — The public limited company Swiss Life Holding was established in 2002 and is incorporated under Swiss law. Its registered office is located in Zurich and it has been listed on the SIX Swiss Exchange since 19 November 2002. Swiss Life Holding brings together all the Swiss Life Group companies and activities under a single holding company. The holding company structure makes it easier to effect investments, enter into partnerships or cooperation agreements and execute capital market transactions. Transparency is also improved by separating the interests of shareholders from those of policyholders.
The operational management structure as at 31 December 2011 is shown on page 53.
Letko Brosseau and Associates Inc., Canada, reported in the publication of 19 April 2011 that it held 956 604 shares, equivalent to a 2.98% share of the voting rights.
BlackRock Inc., USA, reported in a publication of 26 October 2011 that a group consisting of various companies and funds of the BlackRock Group held a total of 962 364 shares and 2808 other purchase positions of Swiss Life Holding, corresponding to 3.01% of the voting rights. In addition BlackRock held 411 sales positions, corresponding to 0.001% of the voting rights.
REGISTRATIONS — Swiss Life Holding shares are not subject to any limitations on transferability. Swiss and foreign banks, securities brokers and companies acting on their behalf may be entered in the share register as nominees if they are holding shares of Swiss Life Holding in their custody for the account of the beneficial owners. Professional asset managers may also be registered as nominees if, in a fiduciary capacity, they have deposited Swiss Life Holding shares for the account of third parties with Swiss or foreign banks or securities brokers in their own name. Nominees are required to be subject to banking or financial market supervision.
MEMBERS OF THE BOARD OF DIRECTORS — On the balance sheet date of 31 December 2011, the Board of Directors was composed of the following members: Year appointed/ Name Main function Additional functions re-elected Elected until
Audit Committee Franziska Tschudi Member Nomination and Compensation Committee 2003/2005/2008/2011 2014 1 Member of the Board of Directors of Swiss Life Ltd since 2000
AL Rolf Dörig laid the groundwork for his professional career by obtaining a doctorate in law (Dr. iur.) from the University of Zurich before being called to the bar in
Swiss Life — Business Review 2011 2006, has held the office of Chairman of economiesuisse. Gerold Bührer was a Member of the Grand Council of the Canton of Schaffhausen from 1982 to 1991 and, from 1991 to 2007, a Member of the Swiss Parliament (National Councillor).
(MBA) before earning his doctorate in economics in 1983 at the University of Lausanne (Dr. ès sc. écon). From 1983 to 2001 he held various positions at the Zurich Financial Services Group in Switzerland and the USA, including Head of Corporate Center and Head of the Business Division Southern Europe, Asia/Pacific, Middle East, Africa and Latin America. From 1993 he served on the Zurich Financial Services Group’s Executive Committee. From 2002 to 2007, Frank Schnewlin chaired the Baloise Group’s Corporate Executive Committee as CEO and was, at the same time, Head of the International Division.
Frank Schnewlin will be put forward for re-election at the General Meeting of Shareholders of Swiss Life Holding on 19 April 2012.
AL Damir Filipovic studied mathematics at the Swiss Federal Institute of Technology in Zurich (ETHZ), where he qualified in 1995 and gained a doctorate in financial mathematics in 2000. He then held research posts at various universities abroad, including the US universities of Stanford, Columbia and Princeton. He was appointed assistant professor at the University of Princeton in 2002, and then from 2003 to 2004 he worked on the development of the Swiss Solvency Test at the Federal Office of Private Insurance in Switzerland. Damir Filipovic went on to hold the chair of financial and actuarial mathematics at the Ludwig Maximilian University of Munich from 2004 to 2007. From 2007 to 2009 he was head of the Vienna Institute of Finance, a research institute affiliated to the University of Vienna and the Vienna University of Economics and Business. In 2010 he was appointed Swissquote Chair in Quantitative Finance and Swiss Finance Institute Professor at the Swiss Federal Institute of Technology in Lausanne (EPFL).
Directors – Banque Morval SA, Member of the Board of Directors – PKB Privatbank AG, Member of the Board of Directors and the Executive Committee – Sowind Group Ltd, Member of the Board of Directors – Global Petroprojects Services Ltd, Member of the
AL Peter Quadri received his master’s degree in economics and business administration (lic. oec. publ.) in 1969 from the University of Zurich. In 1970 he joined
Other appointments: – BIOMED AG, Member of the Board of Directors – St. Gallen-Appenzell Chamber of Commerce and
Industry, Vice Chairperson – economiesuisse, Member of the Executive Board – Swissmem, Member of the Executive Board
INTERNAL ORGANISATIONAL STRUCTURE — In accordance with the Articles of Association, the Board of Directors has issued Organisational Regulations setting forth the internal organisational structure and the duties and competencies of the Board of Directors, the Board of Directors’ committees, the Chairman of the Board of Directors and the Corporate Executive Board. Four standing committees support the work of the Board of Directors as a whole.
CUTIVE BOARD — The Organisational Regulations of Swiss Life Holding provide for the comprehensive delegation of the executive management responsibilities of the company to the Group CEO and the Corporate Executive Board, with the exception of those duties reserved for other bodies in accordance with the law, the Articles of Association or the Organisational Regulations themselves.
The Group CEO directs the business operations of the Group. Together with the Corporate Executive Board, he works out the long-term objectives and strategic orientation of the Group for submission to the Board of Directors and, based on the resolutions of the Board of Directors, ensures the goal-oriented leadership and development of the Group. The Corporate Executive Board can form committees to address specific areas and can delegate competencies to such Corporate Executive Board committees.
Member of the Board Committee – Avenir Suisse, Member of the Board of Trustees and
Member of the Finance Committee – Swiss-American Chamber of Commerce, Member of the Board of Directors (since June 2011)
In August 2009 Thomas Buess joined the Swiss Life Group as Group Chief Financial Officer (Group CFO) and Member of the Corporate Executive Board.
No management tasks have been contractually delegated to third parties by Swiss Life Holding.
The specifications below contain summary information on the compensation policy of the Swiss Life Group and on the compensation paid during the year under review. The full report on compensation is included in the Financial Statements on pages 21 to 31. Further 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 24 and 32) on pages 154 to 159 and 168 to 169. Additional details regarding the compensation and remuneration of the members of the Board of Directors and the Corporate Executive Board, and their participation interests, are also shown in the Notes to the Swiss Life Holding Financial Statements on pages 191 to 202.
The share in the company’s success is measured using quantitative Group objectives (Key Performance Indicators, KPIs), which are defined in advance for a period of three years as part of medium-term planning. The main KPIs, besides the key figures relating to annual profit, costs, business volume, investment return, return on equity and solvency, are the profitability of in-force and new business, margin performance and the share of nontraditional products in new business. In order to avoid conduct aimed at the short-term achievement of key indicators with a higher weighting, the individual KPIs are
Personal performance based on the specified quantitative and qualitative objectives is assessed annually in the employee appraisal procedure implemented throughout the Group (Group Performance System, GPS). Two assessment elements/models are used for determining objectives and evaluating performance: The Group Objectives Model (GOM) relating to qualitative and quantitative objectives and the Group Competency Model (GCM) for measuring and assessing individual competencies and behaviour, incl. the compliance regulations.
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 upon a proposal by the Nomination and Compensation Committee. When determining the level of the allocation to the compensation pool, it takes into consideration the annual result, as well as the degree of achievement of medium-term planning targets. The Board of Directors as a whole is also responsible for determining the individual compensation of members of the Corporate Executive Board. It carries out an annual performance assessment of all members of the Corporate Executive Board, based on preparatory work by the Nomination and Compensation Committee. In addition, current aspects of HR policy and, in particular, succession planning are regularly discussed at meetings of the Nomination and Compensation Committee and the Board of Directors as a whole.
Within the framework of the compensation arrangements for members of the Corporate Executive Board, “deferred compensation in cash” was introduced as a new compensation component on 1 January 2012. On the basis of the corresponding regulations, a portion of the variable cash compensation determined by the Board of Directors is not paid immediately but after a period of three years has elapsed and provided that the regulatory requirements are satisfied at that point. The allocated deferred compensation in cash represents an entitlement during the threeyear deferral period. The underlying “deferred cash plan” also provides for adjustment and reclaiming mechanisms (clawback). If the employment relationship is terminated by a participant during the three-year deferral period, the entitlements expire worthless.
(PSUs), whereby share allocation after expiry of the threeyear period was based on two performance criteria, each weighted at 50%. The allocation mechanism is set out in detail in the 2010 Annual Report and in this Annual Report in the Notes to the Swiss Life Holding Financial Statements on pages 194 to 195. 65 members of Swiss Life Group senior management, including members of the Corporate Executive Board, participated in the 2009 equity compensation plan. A total of 53 216 PSUs were allocated; 22 200 to the Corporate Executive Board, including 6500 to Bruno Pfister as Group CEO. In 2010, 69 members of the Swiss Life Group senior management took part in the plan, in which a total of 68 510 PSUs were allocated; 24 700 to the Corporate Executive Board, of which 6500 to Bruno Pfister in his capacity as Group CEO.
In the period under review, participants in the 2011 equity compensation plan were allocated Restricted Share Units (RSUs) instead of PSUs. As with PSUs, 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, but without any additional leverage effect. 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. The value of RSUs during the three-year term develops linear with the Swiss Life Holding share price and thus symmetrically corresponds with shareholder interests. During the period under review, a total of 62 members of Swiss Life Group senior management participated in the 2011 equity compensation plan, which came into effect on 1 April 2011.
There were no personnel changes on the Corporate Executive Board during 2010 and 2011.
The compensation takes into account membership of the Board of Directors of Swiss Life Holding and its subsidiary Swiss Life Ltd, as well as membership of the individual Board Committees, and is commensurate with the individual’s function and workload. The compensation is determined annually by the Board of Directors. The amount of compensation granted to members of the Board of Directors has been adjusted in the 2011 financial year in connection with the new compensation arrangements (transition to exclusively fixed compensation, payable 70% in cash and 30% in blocked shares), taking into consideration compensation paid to board members in comparable companies within the insurance sector.
The acting members of the Board of Directors of Swiss Life Holding on the balance sheet date received the following compensation for the period under review: Compensation in cash in CHF Shares with three-year blocking period
Compensation remitted to members of the Corporate Executive Board comprises the basic salary, variable compensation in cash and other compensation (child allowances, company cars, premium contributions to 3rd pillar pension plans). The variable compensation in cash is allocated as a bonus and, if applicable, as deferred compensation in cash. The deferred compensation in cash, which was introduced on 1 January 2012, is paid out after a period of three years has elapsed and provided that the regulatory requirements have been satisfied. In addition, a midto long-term compensation component is in place in the form of an equity compensation plan linked to the performance of the Swiss Life Holding share price. As mentioned above, it gives an entitlement to Swiss Life Holding shares after a period of three years has elapsed and provided that the relevant requirements are satisfied at the time of allocation.
SHARE OWNERSHIP — On the balance sheet date of 31 December 2011, acting members of the Board of Directors and the Corporate Executive Board (including closely linked parties) held the following number of Swiss Life Holding registered shares: SLH shares
The number of future subscription rights to Swiss Life Holding shares allocated in the context of the above-mentioned equity compensation plan to members of the Corporate Executive Board is shown in table form in the Notes to the Swiss Life Holding Financial Statements.
UTIVE BOARD — Bruno Pfister, as Group CEO, received the highest total compensation for a member of the Corporate Executive Board in the period under review.
2 Deferred compensation in cash of CHF 360 000; this compensation component was introduced on 1 January 2012 and will be paid out on 1 April 2015, provided the regulatory requirements are satisfied at that point.
SHAREHOLDERS AND AGENDA — The rules set out in the Articles of Association for convening a General Meeting of Shareholders 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.
ENTRY IN THE SHARE REGISTER — Entries can be made in the share register up to the day before the General Meeting of Shareholders. In all cases, however, the company reserves the right to adhere to the legal maximum period of 20 days for recognition of entries in the share register in accordance with Art. 685g of the Swiss Code of Obligations.
CLAUSES ON CHANGES OF CONTROL — No contractual provisions exist in favour of the Board of Directors or the Corporate Executive Board with regard to changes of control of the company.
OF THE LEAD AUDITOR — The Articles of Association stipulate that the external auditor is to be elected by the General Meeting of Shareholders for one financial year at a time. When Swiss Life Holding was established in 2002, PwC was named as statutory auditor and Group auditor. Since then PwC has been re-elected without fail. PwC has also acted as statutory auditor and Group 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 General Meeting of Shareholders. The partner at PwC in charge of auditing the Swiss Life Holding annual financial statements and consolidated financial statements (lead auditor) took over the responsibility in the 2011 financial year. The role of lead auditor rotates in compliance with the term of office regulations stipulated by the Swiss Code of Obligations, the independency guidelines set forth by the Swiss Institute of Certified Accountants and Tax Consultants, and internal guidelines at PwC.
The external auditors submit regular written reports on the status of the auditing work. They also submit detailed reports on the half-year and annual financial statements to the Audit Committee. At the end of the year, the external auditors draw up a comprehensive report for the attention of the General Meeting of Shareholders and a detailed report on the financial year just completed for
Swiss Life — Business Review 2011 the attention of the Audit Committee, the Board of Directors and the Swiss Financial Market Supervisory Authority FINMA.
At www.swisslife.com/subscription, all interested parties can subscribe to the company’s mailing list so as to receive timely ad hoc reports and media releases free of charge via the e-mail distribution system. These releases are also published on the Swiss Life website at the same time as they are sent to subscribers, and are available online for at least two years at www.swisslife.com, “Media” area, “Media releases” section (www.swisslife.com/mediareleases ).
The full corporate governance report is provided in the Financial Statements (accessible at www.swisslife.com/report).
Impairment of property and equipment and intangible assets 17, 18 –11 –5
Net profit attributable to equity holders of Swiss Life Holding 605 557 non-controlling interests 1 3
In CHF million Foreign Gains/losses currency recognised Total NonShare Share Treasury translation directly in Retained shareholders’ controlling
Equity-settled share-based payments – 5 – – – – 5 0 5
Equity-settled share-based payments – 3 – – – – 3 – 3
Dow Jones STOXX 600 Insurance Index (in EUR) 30.12. 133.25 154.45 152.08 134.68 252.21
Performance Dow Jones STOXX 600 Insurance Index (in %) –14 +2 +13 –47 –12
Total dividend payout to shareholders (in CHF million) 28.07. 144 77 160 596 245
Dividend yield on year-end price (in %) 30.12. 5.21 1.78 3.79 23.48 2.47
Financial result (without share of results of associates) 4 459 4 368 4 588 600 4 923
Net insurance benefits and claims –12 614 –12 704 –11 884 –12 915 –13 268
Net result from continuing operations 606 560 324 –1 143 726
Net result from discontinued operations – – –47 1 488 6421
Equity holders of Swiss Life Holding 605 557 278 350 1 345
PUBLISHER — Swiss Life Holding Ltd, Zurich EDITORIAL RESPONSIBILITY — Swiss Life Group Communications, Zurich CONCEPT AND DESIGN — Eclat AG, Erlenbach, Canton of Zurich PHOTOGRAPHY — Basil Stücheli, Zurich; Stephan Knecht, Zurich PRODUCTION — Management Digital Data AG, Lenzburg, Canton of Aargau PRINTERS — Heer Druck AG, Sulgen, Canton of Thurgau © Swiss Life Holding Ltd, 2012