1 equity excl. unrealised gains/losses on financial instruments 2 incl. share buy-back (2019: CHF 913 million / 2018: CHF 87 million)
GROSS WRITTEN PREMIUMS, POLICY FEES AND DEPOSITS RECEIVED 5 901 5 859 1%
In publications dated 23 April 2019, 20 July 2019, 6 August 2019 and 28 November 2019 in the context of a share buyback programme for approximately CHF 1 billion (CHF 999 995 716.25) launched at the end of 2018 and completed on 5 December 2019, Swiss Life Holding Ltd, General Guisan-Quai 40, 8002 Zurich, Switzerland, reported several instances in which figures exceeded or fell short of thresholds. According to the last report dated 28 November 2019, Swiss Life Holding Ltd then held 1 685 005 treasury shares, corresponding to 5.02% of voting rights.
In 2018 there were no changes to the share capital. The distribution of CHF 13.50 per share approved by the General Meeting on 24 April 2018 was made from the capital contribution reserves.
Other appointments: – Siegfried Holding Ltd, Member of the Board of Directors – Repower AG, Member of the Board of Directors – Engadiner Kraftwerke AG, Chairman of the Board of Directors – Elettricità Industriale SA, Chairman of the Board of Directors – Calanda Kies und Beton Gruppe, Chairman of the Board of Directors – Fontavis AG, Member of the Board of Directors – Dogger Ltd, Member of the Board of Directors – The Association of the Swiss Natural Gas Industry (Verband der Schweizerischen
The Board of Directors meets as often as business requires, usually at least six times a year. Meetings are generally called by the Chairman. However, any member of the Board of Directors may request that a meeting be called, as may the Corporate Executive Board. In addition to the members of the Board of Directors, the Group CEO also generally attends the meetings or parts of meetings in an advisory capacity, as do other members of the Corporate Executive Board when required.
The Board of Directors appoints the Chairman of the Compensation Committee from among the latter’s members and issues regulations for the Compensation Committee.
Since 2011 participants in the equity compensation plan have been allocated Restricted Share Units (RSUs) on 1 April (2011–2013 equity compensation plans) or on 1 March (equity compensation plans from 2014). The RSUs grant the holder future subscription rights, entitling them to receive Swiss Life Holding shares free of charge after a three-year period has elapsed. The attribution of shares after the expiry of the three-year deferral period is effected on a 1:1 basis (1 RSU = 1 share): the plan is therefore very simple, transparent throughout the whole term and directly linked to the performance of the Swiss Life share price. The value of RSUs during the three-year term develops linearly with the Swiss Life Holding share price and thus symmetrically corresponds with shareholder interests. Altogether 51 members participated in the 2016 equity compensation plan, in which a total of 51 270 RSUs were allocated: 14 586 in total to the Corporate Executive Board, of which 3478 to Patrick Frost in his capacity as Group CEO. In all, 58 members of Swiss Life Group senior management participated in the 2017 equity compensation plan, in which a total of 43 768 RSUs were allocated: 12 177 in total to the Corporate Executive Board, of which 3017 to Patrick Frost, in his capacity as Group CEO. A total of 57 members of Swiss Life Group senior management participated in the 2018 equity compensation plan. A total of 42 950 RSUs were allocated: 11 454 in total to the members of the Corporate Executive Board, of which 2828 RSUs to Patrick Frost as Group CEO. 65 persons participated in the 2019 equity compensation plan and a total of 40 840 RSUs were allocated: 10 237 in total to the Corporate Executive Board, of which 2496 to Group CEO Patrick Frost. Under the 2020 equity compensation plan, a total of 42 553 RSUs were allocated to 62 members of Swiss Life Group senior management; members of the Corporate Executive Board received a total of 10 993 RSUs, of which 2519 were allocated to Group CEO Patrick Frost.
Rolf Dörig, Chairman of the Board of Directors 840 000 743 360 492 1 200 492 2 This includes the compensation of CHF 16 000 for the membership of the Board of Directors of Fontavis AG, a 100% subsidiary of Swiss Life Investment Management
At the General Meeting of Shareholders of 28 April 2020, the Board of Directors will again submit for approval the maximum amount of the fixed compensation and long-term variable compensation component (equity compensation plan) for the Corporate Executive Board for the 2021 financial year.
SLH shares 1 Total number of RSUs allocated in the years 2017, 2018 and 2019 in connection with the relevant equity compensation plan. The RSUs represent future subscription rights that entitle the individuals concerned to receive SLH shares after a period of three years, provided that the relevant conditions are met at that point. In addition to the reported shareholding, Thomas Buess held a total of 4512 RSUs as at the balance sheet date of 31 December 2019, which were allocated to him in 2017, 2018 and 2019 in the context of his former function as Group CFO and Member of the Corporate Executive Board of Swiss Life.
Operational risk management at Swiss Life employs methods and processes to identify, assess, control and avoid operational risks. Operational risk management defines operational risk as the danger that losses may result from shortcomings or failures stemming from internal processes, people, systems or external events. Swiss Life’s internal control system consists of the entirety of procedures, methods and measures prescribed by the Board of Directors and the Corporate Executive Board to ensure the orderly conduct of business. The focus is on the reliability of financial reporting, the effectiveness of business processes and compliance with laws and regulations issued to protect the company’s assets. Risk Management prepares and maintains corresponding internal directives and minimum requirements for qualitative risk management and the ICS. These are based on the standard “Internal Control — Integrated Framework (2013)” of the internationally recognised Committee of Sponsoring Organizations of the Treadway Commission (COSO).
Digitalisation Swiss Life is pursuing digitalisation along the entire value chain, using it to create relevant and sustainable added value for customers and employees.
1 This topic is discussed in the Annual Report in the section “Strategy & Brand” from page 8. 2 This topic is discussed in the Annual Report in the section “Corporate Governance” from page 26.
As a major investor, Swiss Life is committed to ensuring that direct investments in its portfolio are in line with its fundamental standards and values. As a signatory to the UN Global Compact, Swiss Life is committed, among other things, to the fundamental principles for respecting human rights.
– At the same time, as a long-term investor, Swiss Life contributes to the stability of the financial centre.
– In 2019, the foundation set up a new project “KinderHelden”, a mentoring initiative that gives primary school children who started life in challenging conditions better opportunities for education and a place in society. The project will run for at least three years and more than ten Swiss Life employees already volunteer as mentors. Preparations are under way for a further “KinderHelden” location in Munich, which is scheduled to open in 2020.
Swiss Life anticipates the rapid changes in professional knowledge and methodology in the world of work by offering its employees a wide range of training and development activities.
– The Works Council has responded to the new working requirements (workplaces and technology) through a works agreement on more flexible working.
Swiss Life wants to increase the share of electricity it uses in its buildings from renewable energy sources, with a target of reaching 100% by 2021.
GRI 102-2 Activities, brands, products and services p. 5, p. 8–13, p. 95–96
Guidelines for social assessment of suppliers yes yes yes yes AR, p. 89, p. 106–108
Financial assets at fair value through profit or loss 10 43 692 39 155
Deferred income tax assets 24 72 55 1 Including IFRS 16 right-of-use assets
Future lease payments under non-cancellable operating leases as disclosed at 31.12.2018 170
Property and equipment are carried at cost less accumulated depreciation. Land is carried at cost and not depreciated. Depreciation is principally calculated using the straight-line method to allocate the cost of assets to their residual values over the assets’ estimated useful life as follows: buildings 25 to 50 years; furniture and fixtures five to ten years; computer hardware three to five years.
Premiums earned on insurance contracts 8 469 2 843 1 200 47 – 0 12 558 –18 12 540
In certain countries, specific additional guidelines and rules have been defined locally to monitor credit risk. Such guidelines cover investments in fixed-income securities which are mostly based on the average rating of the issuers (calculated by weighting default probabilities). Minimum and maximum thresholds apply with regard to permitted investments in non-government bonds. For investments in government bonds with a rating lower than AA– (according to Standard & Poor’s or equivalent), additional exposure limits are in place. For certain businesses, credit risk is monitored and controlled with a risk limit framework whereby maximum limits are reviewed and approved at least annually. The majority of the bond portfolio is invested in government bonds (including supranational and sovereigns) and bonds issued by the financial sector covered by collateral or government guarantees.
Exposure to credit risk of debt instruments that meet the SPPI criterion as at 31 December 2019 in CHF million
In 2019, diluted earnings per share solely include the dilutive effect of share options issued. Share options are dilutive when they would result in the issuance of shares for less than the average market price during the period. Dilutive share options are assumed to have been exercised. The assumed proceeds are regarded as having been received from the issuance of shares at the average market price during the period. The difference between the number of shares issued and the number of shares that would have been issued at the average market price during the period is considered an issuance of shares for no consideration.
Derivatives designated as net investment hedges 85 40 – 5 4 461 4 217
Interest rate swaps to hedge bond portfolios 107 22 5 826 196 –38 38 –196
As at 31 December 2019, customer relationships comprise customer relationships relating to Swiss Life Select: CHF 2 million (31.12.2018: CHF 3 million), which were allocated to the “Switzerland ” segment. The “France” segment comprises customer relationships of CHF 8 million (31.12.2018: CHF 12 million) and the “Asset Managers” segment of CHF 87 million (31.12.2018: CHF 87 million). The “International” segment comprises customer relationships of CHF 8 million (31.12.2018: CHF 9 million). Customer relationships were included in the impairment test of the respective cash-generating unit.
The 2015 equity compensation plan is based on the Group-wide programme “Swiss Life 2015”, which was announced at the Swiss Life Group’s Investors’ Day on 28 November 2012. On the basis of the medium-term planning 2013–2015 (2013 equity compensation plan) and 2014 – 2016 (2014 equity compensation plan), performance criteria relating to cost efficiency (50% weighting), the risk and fee result (25% weighting) and IFRS profit (25% weighting) have been determined by the Board of Directors. With regard to the 2015 equity compensation plan, the Board of Directors has set the following performance criteria on the basis of the medium-term planning 2015– 2017: IFRS profit (50% weighting), the risk and fee result (25% weighting) and cash to Swiss Life Holding for further strengthening of the financial substance and payout capacity (25% weighting ). After expiry of the three-year period of the RSU plan, the target value for each performance criterion according to the medium-term planning is compared with the actual result achieved. The share allocation corresponds to the number of allocated RSUs (1 RSU = 1 share) if all three performance criteria have been achieved or exceeded after the three-year period has elapsed; overperformance does not lead to a higher share allocation. If the targets are only partly achieved, the share allocation is correspondingly reduced in accordance with the weighting of the performance target concerned, or the RSUs expire worthless.
In 2017, the number of RSUs granted under this programme amounted to 45 135. The fair value at the mea surement date amounted to CHF 281.80. The date of grant was 1 March 2017.
NET DEFERRED INCOME TAX ASSETS/LIABILITIES –1 936 67 –371 –135 15 –2 360
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 amount of such temporary differences was approximately CHF 11.7 billion as at 31 December 2019 (2018: CHF 9.6 billion). If such amounts from entities controlled by the Group are ever distributed, no material tax liabilities would be incurred due to participation exemption rules, unrecognised tax loss carryforwards and applicable double taxation treaties.
Net cash flows from operating activities 1 203 –147 –1 –3
The Swiss Solvency Test (SST) is the Swiss legislation which governs the capital requirements of insurance companies and groups. It is a principle-based framework whose 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. Since 1 January 2019 Swiss Life has used the new SST standard model with some company-specific adjustments for the determination of the regulatory solvency.
Securities pledged under repurchase agreements1 2 438 4 767 2 438 4 767
Rhein-Wiese AG, Zürich CH from 20.06.2019 100.0% 100.0% Real estate CHF 160 000 000
SCI SWISSLIFE 148 UNIVERSITE, Paris FR 100.0% 100.0% Real estate EUR 1 000
BVIFG I General Partner GmbH, Berlin AM from 30.08.2018 100.0% 100.0% Asset management & Real estate EUR 25 000
RheinCOR Projektentwicklung GmbH, Köln AM 55.0% 55.0% Asset management & Real estate EUR 25 000
Swiss Life Invest GmbH, München AM 100.0% 100.0% Asset management EUR 700 000
Opportunities S.C.A., SICAV-SIF, Luxembourg AM 82.6% 82.6% Asset management EUR 895 738 871
In our opinion, the consolidated financial statements (pages 152-304) give a true and fair view of the consolidated financial position of the Group as at 31 December 2019 and its consolidated financial performance and its consolidated cash flows for the year then ended in accordance with the International Financial Reporting Standards (IFRS) and comply with Swiss law.
Based on the work performed, we determined that the models and assumptions used in the valuation of actuarially determined future life policyholder benefits are reasonable and in line with financial reporting requirements and industry accepted practice.
The recoverable amounts have been determined on a valuein -use basis and use cash flow projections based on financial budgets approved by management and the board of directors. The calculations are based on present values that use a single set of estimated cash flows and a single discount rate per cash generating unit. The cash flow projections cover a three or five-year period, and consider a terminal value after such period, based on long-term growth assumptions in the various geographical markets, which is material to the overall value-in-use.
We consider the valuation approach, and the assumptions and parameters used within, as a reasonable and adequate basis for management’s assessment of the recoverability of goodwill. The audit evidence obtained through our audit procedures was sufficient and suitable to assess the recoverability of goodwill
As part of the share buyback programme, the year under review saw Swiss Life Holding purchase a total of 1 981 015 treasury shares at an average price of CHF 461.02. Over the same period, 628 500 shares were cancelled in the first share cancellation programme. The Swiss Life Group therefore held 1 580 215 treasury shares as at 31 December 2019.
The global stock market indices performed strongly in 2019, mainly due to three consecutive rate cuts decided by the US Federal Reserve. In such an environment the Swiss Market Index (SMI) also showed a very good performance of +26%. Swiss Life’s share price developed strongly in 2019, closing the year with an increase of 28%. The share thus outperformed both the SMI and the European Dow Jones StOXX 600 insurance index (+24%). At the Annual General Meeting in April 2019, shareholders approved a withholding tax-free distribution of CHF 2.50 per share from the capital contribution and an ordinary dividend payment of CHF 14.00. In December 2019, Swiss Life has also successfully completed a CHF 1 billion share buyback programme.
Annual Report 2019 The Annual Report is published in German and English and contains information on corporate governance, risk management, sustainability and the annual accounts.