Strategy Swiss Life has almost 160 years of experience affording people financial security. Thanks to a clear strategy and consistent implementation of planning, Swiss Life can offer its customers a long-term, solid, attractive value proposition.
As part of its reporting on annual and semi-annual results, Swiss Life regularly provides detailed information on the current status of its strategic implementation and the progress of its objectives achievement.
As at 31 December 2015, Swiss Life Asset Managers had a total of CHF 185 billion under management (+1%), including CHF 39 billion in real estate. Swiss Life also manages CHF 28.6 billion in real estate for third parties, which makes the company one of Europe’s leading real estate managers with CHF 67.6 billion under management and administration. In its third-party customer business, Swiss Life Asset Managers posted net new assets of CHF 7.2 billion. The company thus had CHF 38.8 billion in assets under management for third parties by the end of 2015.
For events of particular importance occurring after the end of the business year, please refer to Note 35, “Events after the Reporting Period”, in the consolidated financial statements.
Corporate Clients specialises in global life and pensions solutions for multinationals. Sustained positive risk development and increased reserves enabled Corporate Clients to further consolidate its own balance sheet in Luxembourg. The Swiss Life Network, a leading independent provider of global employee benefits solutions, also consolidated its strong market position in 2015.
The capital structure of Swiss Life Holding was as follows on the balance sheet date: – Ordinary share capital: CHF 163 613 375.40, divided into 32 081 054 fully paid registered shares with a par value of CHF 5.10 each
The Articles of Association of Swiss Life Holding can be found at www.swisslife.com, “About us” area, “Organisation” section, “Corporate Governance” and “Articles” subsections (www.swisslife. com/statuten). The Organisational Regulations are also published on Swiss Life’s internet site in the “About us” area, “Organisation” section, “Corporate Governance” and “Organisational Regulations ” subsections (www.swisslife.com/en/organisation).
Other appointments: – Sanitas Krankenversicherung and Sanitas Beteiligungen AG, Member of the Board of Trustees and Vice Chairman of the Board of Directors – Valiant Holding AG and Valiant Bank AG, Vice Chairman of the Board of Directors – Swiss Insurance Association (SIA), Member of the Managing Board – Zurich Chamber of Commerce, Member of the Board – German-Swiss Chamber of Commerce, Member of the Board – Financial Market Authority (FMA) Liechtenstein, Member of the Board of Directors
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 short-term variable compensation component based on achievement of the annual objectives, which is generally paid in cash and possibly in shares and, if applicable, as deferred compensation in cash, and a long-term variable compensation component in the form of an equity compensation plan, as well as contributions to occupational provisions and risk insurance.
Despite the low interest rate environment and negative interest rates, as well as the decision by the Swiss National Bank (SNB) of 15 January 2015 to discontinue the minimum rate against the euro, Swiss Life once again grew profitably during the year under review. The targets set in medium-term planning were clearly exceeded. Compared with the previous year, adjusted operating income grew at a high level, by 17% to CHF 1.3 billion, and IFRS net profit by 7% to CHF 878 million; insurance reserves, meanwhile, were also strengthened anew in favour of policyholders, by a total of CHF 1.2 billion. Fee and commission income stood at CHF 1.3 billion, and thus posted an 8% improvement year-on-year in local currency. The target was also surpassed with regard to adjusted return on equity, which at 9.7% is once again at the upper end of the target ambition of 8–10%. Also with regard to solvency all quantitative and qualitative solvency targets were met in the course of SST implementation. Although interest rates were low, the new business margin posted a robust 1.7%, and the value of new business increased by 5% to CHF 268 million despite the very difficult environment. Finally, targets for strengthening Swiss Life Holding’s financial substance and payout capacity were also met, and all units achieved their cost targets.
In Germany written customer communication has been rethought to make it clearer and better structured. The number of inquiries to customer service has thus been reduced by some 30% over the previous year.
All initiatives support Swiss Life in its quest to become a customer-oriented organisation and ensure its customers will remain at the heart of its business going forward.
Swiss Life has longstanding experience in developing innovative and customer-oriented products in its life insurance and pensions business. Its customers and their needs are always the focus of all Swiss Life’s activities. The Swiss Life product strategy thus combines optimal customer value with profitability for the company. Regulators’ demands, regarding such things as solvency, as well as external factors like the economic and interest rate environment or demographic trends, must also be considered. Optimising and constantly developing the existing range of offerings so as to take into account all target groups, such as customers, investors, shareholders and supervisory authorities, is crucial in this endeavour.
The year under review saw Swiss Life subject to no monetary penalties or fines, and the company did not make any settlements in connection with corruption charges.
Operational risk management (ORM) at Swiss Life includes the methods and processes used for the identification, assessment and steering or avoidance of operational risks. ORM defines operational risk as the danger that losses may result from shortcomings or failures in internal processes, people or systems, or from 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.
Swiss Life has been an active supporter of film-making in Switzerland for many years. The films usually centre around people and their stories – just as Swiss Life does. For example, Swiss Life is committed to the Solothurner Filmtage, the Festival del Film in Locarno and the Zurich Film Festival.
The Group-wide initiative “Health” launched in 2014 was brought to a successful conclusion during the year under review. The market units have already formulated many offers in recent years geared towards this field. Current offers were reviewed, consolidated and extended as part of the initiative. The jointly managed working groups (employer representatives of Swiss Life and representatives of the local works councils) were responsible for the implementation in the divisions.
G4-20 Material aspects and report boundaries within the organisation p. 79
G4-LA11 Employee performance and career development reviews p. 95 Diversity and Equal Opportunity p. 98-99
The cost of credit risk amounts to CHF –693 million for 2015 compared to CHF –665 million for the previous year.
Am besten von „Operating MCEV earnings“ oder Total „MCEV earnings“ ausgehen. Sieht man einen Balken praktisch nicht mehr, kann „beschissen“ werden.
Operational and demographic sensitivities for MCEV remained stable overall, while the sensitivities with regard to reference rates increased. Sensitivities relating to swaption implied volatilities are influenced by the Swiss group life business, where continued operating improvements have contained the cost of policyholder options and guarantees, such that business-inherent shareholder options drive the time value of options and guarantees. As in the previous year, we disclose corresponding sensitivities of ±10%. The relative sensitivities with regard to equity/property market values and their volatilities slightly increased compared to 2014.
Other non-operating variances reflect the reduction of the applied tax rate in Luxembourg.
Swiss Life – Annual Report 2015 4 Methodology 4.1 MCEV components for covered business
5.2.1 Tax assumptions 1 Following French legislation the tax rate assumption applied for 2015 is 38.0%.
Premiums earned on investment contracts with discretionary participation 1 009 893
The Group recognises the contribution payable to a defined contribution plan in exchange for the services of the employees rendered during the period as an expense.
Certain reported amounts of assets and liabilities are subject to estimates and assumptions. Estimates and judgements by management are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.
Intercompany trademark fees charged and received for the use of the Swiss Life brand have been excluded from the segment result. The statement of income for the year ended 31 December 2014 has been adjusted accordingly.
Share of profit or loss of associates 0 4 0 – –1 0 3 – 3
Benefits and claims recovered from reinsurers 16 125 22 2 – –3 163 –65 98
Assets held for sale 4 – – – – – 4 – 4
Net gains/losses on financial assets 8 228 2 631 21 – 248 2 631
Debt securities at fair value through profit or loss 635 595 5 785 6 240 6 421 6 835
The following table shows the extent to which collateral and other credit enhancements mitigate credit risk in respect of the maximum exposure to credit risk.
Assets held for sale 4 – – – – – 4 –
Deposits received under insurance and investment contracts 4 658 4 831
Financial assets designated as at fair value through profit or loss 1 18 169
Assets for the account and risk of the Swiss Life Group’s customers 1 –315 1 897
Change in liability for future life policyholder benefits, gross 488 457
Derivatives designated as fair value hedges 29 – 50 46 9 582 1 312
Other debt securities classified as loans 433 477 – – 433 477
Revaluation in respect of transfers to investment property 0 – – – 0
TOTAL OTHER INTANGIBLE ASSETS AS AT END OF PERIOD 1 234 70 51 21 1 376 1 includes elimination of fully amortised/impaired assets
In December 2013, Swiss Life Holding issued CHF 500 million in senior unsecured convertible bonds due in 2020. The coupon was set at 0%. The bonds may be converted into registered shares of Swiss Life Holding at the option of the holder. The initial conversion price was set at CHF 243.97 (later adjusted to CHF 240.70, valid since 29 April 2015). The proceeds from the issue of the convertible bonds have been split between a liability component and an equity component. The fair value of the liability component at issue date amounted to CHF 450 million and was calculated using a market interest rate for an equivalent non-convertible bond. The residual amount of CHF 50 million represented the value of the option to convert the instrument into Swiss Life Holding shares and was included in share premium. Transaction costs of CHF 6 million were deducted from the liability and costs of CHF 1 million were recognised in share premium.
NET CHANGE IN CASH AND CASH EQUIVALENTS 101 55 –1 0
Financial instruments As a general rule, fair values of financial instruments are based on quoted prices sourced from wellknown independent price providers such as Bloomberg. Model-based level 2 and level 3 valuations of financial instruments are applied to a minority of the assets.
Assets for the account and risk of the Swiss Life Group’s customers 23 300 24 369 1 243 857 2 750 3 750 27 293 28 975
Securities pledged under repurchase agreements 1 2 109 2 763 2 109 2 763
Swiss Life Lab AG, Zürich CH from 22.06.2015 100.0% 100.0% Information technology
CORPUS SIREO Projektentwicklung Wohnen Residenz GmbH, Köln AM until 19.03.2015 – –
SL Private Equity GmbH, Frankfurt am Main DE 98.9% 98.9% Private equity
Swiss Life Assurance Solutions S.A., Branch Germany, München Other until 10.03.2014 – –
Swiss Life Insurance Solutions S.A., Strassen Other 100.0% 100.0% Life insurance/Reinsurance
Swiss Life Deutschland Holding GmbH, Hannover EUR 25 100.00% EUR 25 100.00%
Equity holders of Swiss Life Holding 872 814 781 98 605