Completed From December 2018 to December 2019, the Group implemented a share buyback programme of CHF 1 billion.
Swiss Life was able to increase its fee income by 8% to CHF 1957 million. Of that, the contribution by owned IFAs increased by 8%, Swiss Life Asset Managers by 6% and from own and third-party products and services by 4%. Swiss Life posted premiums of CHF 20.0 billion for 2020. The decline of 13% and the associated normalisation are due to the extraordinarily high single premiums written by Swiss Life in the previous year, as a result of the withdrawal of a competitor from the full insurance business in Switzerland. Insurance reserves to the benefit of the company’s policyholders rose by 2% in local currency.
GROSS WRITTEN PREMIUMS, POLICY FEES AND DEPOSITS RECEIVED 6 277 5 901 6%
In 2018, Swiss Life Asset Managers signed up to the United Nations-supported Principles for Responsible Investment (PRI) and became, inter alia, a member of the Global Real Estate Sustainability Benchmark (GRESB). In line with its responsible investment strategy, Swiss Life Asset Managers has continuously developed its product offering to meet increased customer demand for sustainable products and has launched new investment products. Today, clients have the opportunity to invest in a broad range of sustainable securities, real estate and infrastructure funds, thus contributing to sustainable development through their investments.
Additional information on the Swiss Life share is available in the section “Share Performance and Historical Comparison” on pages 344 and 345.
Ueli Dietiker will be put forward for re-election as Member of the Board of Directors at the Annual General Meeting of Swiss Life Holding on 23 April 2021.
The performance of the Corporate Executive Board and the contributions made by the individual members are regularly discussed and evaluated by the Chairman’s and Corporate Governance Committee, the Compensation Committee and the Board of Directors, with no members of the Corporate Executive Board being present. The acceptance of directorships and senior political or military roles by members of the Corporate Executive Board is subject to the consent of the Chairman of the Board of Directors.
On 31 December 2020 the Corporate Executive Board of Swiss Life Holding was composed of the following members: Member of the Corporate Executive Name Function Board since
Stefan Mächler — Born 1960, Swiss national Group Chief Investment Officer (Group CIO)
Tanguy Polet — Born 1970, Belgian national Chief Executive Officer France (CEO France) from 1 March 2021 bild Tanguy Polet studied law at the University of Louvain-La-Neuve (Belgium) and graduated in economic and social law. From 1994 he worked as a lawyer in Brussels, successively with Roberti & Associés (now Meritius), Peeters Advocaten-Avocats (Ernst & Young) and Simmons & Simmons. He specialises in commercial and financial law as well as consumer protection. In 2005, Tanguy Polet joined
In order to be eligible for any variable compensation, a GPS target achievement of at least 80% is required.
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 linked to short-term variable compensation on 1 January 2012. On the basis of the corresponding regulations, a portion of the short-term 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). A full or partial reduction of the deferred compensation is provided for in the following cases: 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 by participants in the plan. If the employment relationship is terminated by a participant during the three-year deferral period for deferred compensation in cash, the entitlements expire worthless (retention component). For the 2020 financial year, the Board of Directors has determined that, as from a variable compensation amount in cash of CHF 500 000, 23% (or 33% for the Group CEO) of the total variable compensation in cash is to be allocated as deferred compensation.
The 2017 and 2018 equity compensation plans are based on the “Swiss Life 2018” Group-wide programme, which was announced at the Swiss Life Group’s Investor Day on 25 November 2015 (see www.swisslife.com/investorday2015). On that basis and based on the relevant mid-term planning (MTP), the following performance criteria were set for the next three years, in each case cumulatively over the three-year period: IFRS profit (50% weighting), the risk and fee result (25% weighting) and Cash to Swiss Life Holding (25% weighting).
The attribution of the long-term variable compensation component (equity compensation plan, RSU plan) is deferred for a period of three years from the date of allocation, as is the case with the deferred compensation in cash. Likewise, the RSU plans provide for adjustment and reclaiming mechanisms (clawback). These apply in the event of a negative impact of the key figures applying to the allocation of deferred compensation due to a retroactive correction to a resta tement of the annual accounts and in the case of 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 term of the RSU plan, the future entitlements expire worthless.
For the period from the 2019 Annual General Meeting to the 2020 Annual General Meeting, the General Meeting of Shareholders of 30 April 2019 approved a maximum amount of fixed compensation for the Board of Directors totalling CHF 3 200 000. Effectively the fixed compensation for the Board of Directors during the period in question (2019 General Meeting to 2020 General Meeting) was CHF 3 190 729 in total.
Swiss Life – Annual Report 2020 40% of the variable compensation is based on Corporate Executive Board members’ achievement of specified personal goals. On the one hand, these personal goals are linked back to the company’s success, in that each Corporate Executive Board member has to meet personal quantitative objectives contributing to the company’s success in relation to his division. On the other hand, the personal goals cover qualitative aspects, namely project targets, risk management and compliance goals, as well as requirements relating to leadership and to supporting and further developing corporate culture. Qualitative goals for 2020 related to the digital transformation of the distribution channels for Swiss Life and third-party products (e.g. mortgages), harmonization endeavours in respect of financial processes and IT systems, as well as the focused management of cyber risks. The qualitative targets applying equally to all members of the Executive Board also included the optimization of diversity in all divisions within Swiss Life, in particular increasing the proportion of women in management.
The compensation for members of the Corporate Executive Board for the 2020 financial year is reported in detail in the 2020 compensation table below. Patrick Frost, Chairman of the Corporate Executive Board (Group CEO) since 1 July 2014, received the highest compensation of the members of the Corporate Executive Board in the 2020 financial year; accordingly his compensation is disclosed individually.
Expenditure for occupational provisions for members of the Corporate Executive Board in the period under review amounted to CHF 1 596 400. This includes the ordinary annual employer contribution of CHF 275 470 for the occupational benefits of Patrick Frost, Group CEO.
Other members of Corporate Executive Board 1 357 995 0 9 553 051 5 Pursuant to the pension fund regulations, occupational provisions were financed by the employer and the employee at a ratio of 70% to 30%. 6 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
On 29 November 2018, furthermore, Swiss Life presented its targets for 2021 as part of its Investor Day. The relevant information and presentations can be accessed on the internet at www.swisslife.com, “Investors and Shareholders” area, “Investor Days” section (www.swisslife.com/ investordays).
Operational risk management at Swiss Life employs methods and processes to identify, assess, control and avoid operational risks. In this process, operational risks are defined as the risk of negative consequences that 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 by the Corporate Executive Board to ensure the orderly conduct of business. The focus is on the reliability of financial and non-financial reporting, the effectiveness of business processes and compliance with relevant 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 internal control system (ICS). These are based on the interna-
– Swiss Life believes in the competence and engagement of its employees and promotes flexible working models and continuous development throughout all phases of life.
The sustainability organisation is aligned to Swiss Life’s multi-divisional organisation: it comprises sustainability delegates from all divisions as well as specialist delegates. Ten subject areas have been defined for specialist management. In 2020, Swiss Life Group’s sustainability organisation comprised around 31 full-time equivalents (FTE).
The sustainability matrix defined in 2019 has been used again as the basis for the 2020 sustainability reporting (GRI 102-49).
In addition, Swiss Life surveys the internal perception of customer orientation. The internal perception of customer centricity has been measured as part of a Group-wide survey on employee engagement since 2019. The survey is held biannually and conducted in cooperation with an independent consulting agency.
Swiss Life would like to help people develop their financial literacy so they can make better decisions. That is why, among other things, it has supported the Swiss financial literacy platform fintool.ch for years now. In Germany, through the Swiss Life Stiftung für Chancenreichtum und Zukunft (Foundation for Opportunities and the Future), Swiss Life specifically assists projects that promote the education of socially disadvantaged children and young people and support them in difficult life situations.
Swiss Life seeks to minimise the transitory and physical risks associated with climate change in the management of its investment portfolio by focusing on sustainable long-term investment. Thus forward-looking indicators from scenario analyses (e.g. “climate value-at-risk”) are integrated into the investment and risk management processes in addition to carbon intensity. In order to better assess its understanding of climate risks, Swiss Life has participated in the Paris Agreement Capital Transition Assessment (PACTA) since 2017. This was organised by the Swiss Federal Office for the Environment (FOEN) and the “2°Investing Initiative”. The integration of climate scenario metrics and the further application of different transition scenarios will be continued step by step.
Swiss Life – Annual Report 2020 bating the financing of terrorism and in sanctions and embargoes. All employees also undergo refresher training on these issues every two years. During these training sessions, employees are required to confirm their adherence to the Code of Conduct. Participation in such training courses is mandatory and subject to monitoring, and the aim is a 100% participation and success rate. Divisions for which the regulator has prescribed more frequent training must undergo refreshers more often. As of 2020, moreover, some external advisors and other contractors are being trained in compliance issues or required to give a contractual assurance that they will comply with the Code of Conduct.
When working with major international companies in the IT area, Swiss Life works wherever possible with their national companies at all locations.
International - Swiss Life Liechtenstein family-friendly company - Great Place to Work Switzerland
– Due to the Covid-19 pandemic, the International division has introduced four training modules: first, a specific online training programme to improve team leadership in a pandemic; second, a module on “diversity and inclusion”; third, a module on “Energy for team performance ” with the aim of improving the quality of life for team leaders and employees; and fourth, a module on “Leadership after the Crisis: the Role of Leadership during the Recovery”.
– At Swiss Life Asset Managers, equal pay for women and men is actively promoted, e.g. by way of the “Logib” software from the Federal Office for Gender Equality at the Swiss location. The index to measure equal opportunities governed by the “Avenir professionnel” law at the French location is also relevant for Swiss Life Asset Managers France: for 2019/2020, the index for job equality of women and men is 80 points out of 100. Negotiations with social partners are now planned.
Good working conditions influence employee health. Swiss Life attaches great importance to ensuring a holistic work structure with a variety of tasks. Furthermore, it promotes social interaction and autonomy, and offers professional scope as well as learning and development opportunities. The aim is always to ensure that employees’ work is meaningful and to show them appreciation. Swiss Life aims to offer its employees a safe and healthy working environment.
– Swiss Life International has launched the “Manage your Energy for Performance” programme to help employees manage challenging situations in the workplace so that everyone can actively help to improve the quality of life in the office.
The ten-person “Europa Forum”, a committee comprising delegates from four countries, meets regularly with representatives of the Corporate Executive Board at ordinary and extraordinary meetings. It deals with transnational information and consultation on topics which affect all Swiss Life employees. The focal points for 2020 were the Covid-19 pandemic, the “Swiss Life 2021” Group-wide strategy, sustainability, diversity and inclusion, and the “Swiss Life Way of Working” initiative.
Collective bargaining agreements 63% of employees are covered by a collective bargaining agreement.
Swiss Life has set targets for operational ecology which are set out in a Group-wide directive. At the same time, Swiss Life is helping to make its employees more conscious of environmental and climate protection and organises awareness-raising activities at the various locations.
The United Nations’ 17 Sustainable Development Goals (SDGs) are at the heart of the Agenda 2030 for Sustainable Development. Swiss Life is transparent about which of these goals it is already contributing to.
When selecting suppliers and service providers, Swiss Life works with local contractors whenever possible and gives preference to products and services from companies that have implemented a certified environmental protection system.
Following the recommendations of the Task Force on Climate-Related Financial Disclosures (TCFD), Swiss Life publishes a climate report which, among other things, shows the opportunities and risks associated with climate change.
GRI 102-10 Significant changes to the organisation and its supply chain No significant changes
Employee protection/Whistle blowing policy yes yes yes yes AR, p. 107
Monitoring by the Board of Directors yes yes yes yes Code of Conduct
Total number of Annual General Meetings at which 310 361 n/a n/a AR, p. 103 Swiss Life Asset Managers voted
Member of Principles for Responsible Investment (PRI) yes yes yes no AR, p. 104, 151
Voting rights of largest shareholder >5% >5% >5% >5% AR, p. 30–31
Risk management system covers market conduct risks yes yes yes yes AR, p. 79–82
Impairment of property and equipment and intangible assets 16, 17 –21 –3
Reduction in par value 1, 26 –168 9 – – – –159 – – –159
Revenue from sales is recognised when construction is complete and legal title to the property has been transferred to the buyer.
At inception of the lease contract, the leased asset is capitalised (right-of-use asset), measured at the initial amount of the lease liability plus any additional initial payments made before the initial capitalisation and any payments for restoring the leased asset at the end of the lease term. The right-of-use asset is depreciated on a straight-line basis over the useful life of the underlying asset, if the ownership of the underlying asset will be transferred to the lessee by the end of the lease term or a purchase option is reasonably certain to be exercised. Otherwise, the right-of-use asset is depreciated over the useful life of the underlying asset, or the lease term, whichever is shorter. The right-of-use assets are included in property and equipment.
Deferred income tax assets are recognised for unused tax-loss carryforwards and unused tax credits to the extent that realisation of the related tax benefit is probable. The assessment of the probability with regard to the realisation of the tax benefit involves assumptions based on the history of the entity and budgeted data for the future.
Premiums earned on investment contracts with discretionary participation 851 – – – – – 851 – 851
Financial assets pledged as collateral 2 506 1 453 – 61 – 45 4 064 – 4 064
Risks must be identified, assessed, managed and monitored locally and aggregated at Group level. During the year, regular reports covering interest rate risk, equity and real estate price risk, currency risk, credit risk, liquidity risk and insurance risk are prepared by the local insurance units and consolidated at Swiss Life Ltd and at Group level. Strategic and operational risks are assessed and reported on an annual basis.
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.
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-linked features contain financial and insurance guarantees. The liabilities relating to these guarantees are included in the financial and the insurance liabilities, respectively.
TOTAL ASSETS FOR THE ACCOUNT AND RISK OF THE SWISS LIFE GROUP’S CUSTOMERS 39 768 38 193
DILUTED EARNINGS PER SHARE FOR THE NET RESULT ATTRIBUTABLE TO EQUITY HOLDERS OF SWISS LIFE HOLDING (IN CHF) 32.78 36.48
Derivatives designated as net investment hedges 133 85 12 – 4 546 4 461
Currency forwards to hedge non-monetary investments 6 12 6 840 800 –304 304 –800
In 2020, investments in fixed income funds of USD 3972 million (2019: USD 3282 million) and EUR 530 million (2019: EUR 125 million) and investments in real estate funds of EUR 395 million (2019: EUR 1281 million) were hedged.
TOTAL FINANCIAL ASSETS DESIGNATED AS AT FAIR VALUE THROUGH PROFIT OR LOSS 47 336 43 692 11 Financial Assets Available for Sale
As at 1 July 2008, certain financial assets were reclassified from financial assets available for sale to loans and receivables due to the disappearance of an active market. The financial assets reclassified primarily consist of corporate debt instruments and debt instruments relating to emerging markets.
Swiss Life – Annual Report 2020 13 Financial Assets Pledged as Collateral
Non-current liabilities –35 –37 –40 –40 – –177 – –209 –128 –47
In October 2020, a goodwill of CHF 7 million was recognised in the segment “International” in relation to the acquisition of the London based Nestor Financial Group Limited.
1 Including a reduction in past service cost resulting from a plan amendment in 2020.
At 31 December 2020, if the average life expectancy had increased by one year (for both men and women), the defined benefit obligation would have increased by CHF 131 million. At 31 December 2019, if the average life expectancy had increased by one year (for both men and women), the defined benefit obligation would have increased by CHF 133 million.
Share premium comprises additional paid-in capital in excess of the par value (net of transaction costs), gains /losses on own equity instruments and equity compensation benefits.
BALANCE AS AT END OF PERIOD 32 014 391 33 594 606
Net balance as at 1 January –1 012 2 791 348 –10 2 117 68 –301 –232 1 885
Swiss Life – Annual Report 2020 28 Acquisitions and Disposals of Subsidiaries
Interest rate derivatives: – Interest rate swaps are valued on a discounted cash flow basis. Main inputs used to derive the discount factors and forward curves are the overnight index/deposit/swap rates. – Swaptions are theoretically valued with a model based on normal distributed interest rates. Main inputs are the current par swap rate and the implied volatility that is derived from observable volatility curves.
Level 3: Valuation techniques and inputs Discounted cash flow models used for investment property consider the present value of net cash flows to be generated from the property, taking into account expected rent growth rate, vacancy rate, rent-free periods, other costs not paid by tenants, maintenance costs and investment plans. The expected net cash flows are discounted using risk-adjusted discount rates. Location- and property-related criteria are reflected in the discount rate for each property. The criteria reflect the micro- and macro-location characteristics as well as the relevant parameters of the current management situation.
Level 2: Privately placed hybrid debt is categorised as level 2. The fair value of Swiss Life’s privately placed hybrid debt (subordinated step-up loans) is calculated as the present value of the prospective cash flows to the lenders. The discount rate used for the calculation consists of a relevant government bond rate plus a credit spread.
SwissLife Banque Privée, Paris FR 60.0% 60.0% Bank EUR 37 902 080
Swiss Life Select Österreich GmbH, Wien IN 100.0% 100.0% Services EUR 726 728
Based on the overall risk assessment, we selected investment properties for an individual valuation testing. Our sample selection was conducted using specified criteria, such as location, market value, market value deviation compared to the previous year, type of use, and acquisitions of investment property during the reporting period.
Responsibilities of the Board of Directors for the consolidated financial statements The Board of Directors is responsible for the preparation of the consolidated financial statements that give a true and fair view in accordance with IFRS and the provisions of Swiss law, and for such internal control as the Board of Directors determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.
Management Report ..........................................................................................................................................327 Statement of Income ..........................................................................................................................................329 Balance Sheet ........................................................................................................................................................330 Notes to the Financial Statements ................................................................................................................331
Management test the valuation of individual participations through a comparison of the book value of each participation to the respective IFRS equity value. Management utilize the
At the Annual General Meeting of Swiss Life Holding Ltd in April 2020, the shareholders approved a repayment of par value of CHF 5.00 per share and an ordinary dividend distribution of CHF 15.00 per share. In March 2020, Swiss Life initiated another share buyback programme amounting to CHF 400 million. At the end of March 2020, Swiss Life, like all other major listed banks and insurance companies in Switzerland, temporarily suspended its share buyback programme having repurchased shares worth CHF 29 million. On 4 January 2021, Swiss Life resumed the share buyback programme and will repurchase the remaining CHF 371 million under the programme by the end of May 2021.
Total dividend payout to shareholders (in CHF million) 05.05./24.07. 636 547 460 356 271