At Swiss Life we continue to offer full insurance solutions and to strongly support our time-tested three-pillar system, and are accordingly opposed to a Swiss Solvency Test for life insurance companies, which not only disadvantages us in the provision of pension solutions on the international market but also gives our customers less choice. Disproportionate regulation means an unnecessary threat to the pension assets of many SME employees. Any other second pillar solution makes employees and employers bear the investment risk, which is why the offer of guarantees, that only life insurance companies provide in the second pillar, is of such fundamental importance to our country’s small and micro enterprises most of all.
The Global Employee Benefits Solutions business area concentrates on global provisions solutions for multinational companies. Good risk development and higher reserves enabled the consolidation of profitability on its own balance sheet in Luxembourg. Swiss Life Network, a leading independent provider of global employee benefits solutions, made a strong contribution to the result due to its fee optimisation and thus reconfirmed its good market position.
On the balance sheet date of 31 December 2018, the Board of Directors was composed of the following members.
Committee – Renaissance KMU Schweizerische Anlagestiftung, Member of the Board of Trustees – Emaform AG, Member of the Board of Directors – Mobilejobs AG, Chairman of the Board of Directors – Bomatec Holding AG, Member of the Board of Directors – F&P Robotics AG, Member of the Board of Directors – tiko Energy Solutions Ltd, Chairman of the Board of Directors – CT Cinetrade Ltd, Member of the Board of Directors
Damir Filipovic will be put forward for re-election as Member of the Board of Directors at the General Meeting of Shareholders of Swiss Life Holding on 30 April 2019.
The Articles of Association of Swiss Life Holding can be seen at www.swisslife.com, “The Swiss Life Group” area, “Corporate Governance” section, “Organisation and principles” subsection (www.swisslife.com/articles). The Organisational Regulations are also on the Swiss Life internet page, “The Swiss Life Group” area, “Corporate Governance” section, “Organisation and principles” and “Organisational regulations” subsections (www.swisslife.com/en/organisation).
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 Compensation Committee is responsible for putting forward appropriate proposals (for the internal organisation of the Board of Directors see “Internal organisational structure”, pages 40 to 43). The Board of Directors as a whole also establishes the guidelines for the company’s compensation policy. In doing so, it takes into consideration the compensation policies of other companies in the financial services industry, drawing its findings from publicly available information and studies by independent external experts. Comparable companies in the insurance sector in Switzerland used for the purposes of providing relevant information for the current compensation policy included Allianz, AXA, Baloise Insurance, Swiss Re, Zurich Insurance Group and Helvetia.
The partner at PwC in charge of auditing the Swiss Life Holding annual financial statements and consolidated financial statements (lead auditor) has exercised this function since 2018.
Swiss Life uses structured processes to ensure that strategic risks are dealt with adequately in what continues to be a very challenging economic environment. Swiss Life incorporates all the information on risks and corresponding earnings opportunities in its strategic decisions as part of its strategic risk management process. An understanding of the interplay of individual risks is essential to take due account of the factors influencing risks during strategy development so that these factors can be addressed appropriately.
We enable people to lead a self-determined life. This is based on sustainable business operations with a consistent focus on the needs of our customers.
The Swiss Life Group’s Corporate Responsibility Report conforms with the EU’s CSR Directive. In this Corporate Responsibility Report, Swiss Life offers an account of environmental (pages 80, 84, 89–91, 100–107, 130–133), employee (pages 89–91, 116–129) and social issues (pages 80, 84, 88, 100–104, 108–110) and reports on the observance of human rights (pages 80, 84, 86–87, 97–99, 100–101, 105–107) and combating corruption and bribery (pages 80, 84, 97–101, 105–107). The pages cited also provide information on the concepts and associated results, as well as on due diligence process and risk management.
Environmental responsibility Environmental and climate protection Swiss Life places a high value on operational ecology and climate protection. In our in-house operations, as a real estate investor and as co-founder of the Swiss Climate Foundation, we are committed to using resources sparingly and reducing our CO2 emissions.
The development of the NPS at the Service Center contact point
At the heart of Swiss Life’s mission as an asset manager for its proprietary insurance companies and for third parties – such as pension funds, other insurers and private investors via collective investments – are the protection of customer funds and the optimal allocation of risk capital. Invested assets must be secure, profitable and liquid in their entirety. Due to the long-term nature of its liabilities, Swiss Life invests predominantly in fixed-income securities, such as government and corporate bonds, real estate and equity and infrastructure investments. And its investment decisions have always been informed by a long-term assessment of risks and returns.
ESG criteria are a part of the acquisition process for real estate transactions and serve to detect risks and sharpen risk awareness. Sustainability aspects play a central role in real estate development, from feasibility studies to building decisions. This involves defining minimum energy standards, reviewing ecological risk profiles and analysing the socio-economic consequences of property development projects. Such an approach demands that real estate holdings are continuously optimised with regard to social and environmental concerns. In this endeavour Swiss Life aims to steadily reduce its energy consumption to have a positive effect on, among other things, climate change. ESG criteria are taken into account in property upkeep, in both the maintenance and renovation cycles. Swiss Life uses strategies adapted to each location to monitor attainment of financial objectives and optimisation of building sustainability.
In addition to the annual GRESB review, all risks in the real estate area are continuously monitored at the property level and subject to detailed oversight using cutting-edge analytical and benchmarking methods. The focus of this scrutiny is on property and market risks as well as the early detection of structural and socio-economic changes.
Percentage split of purchasing volume by category based on the Swiss location (excl. Asset Managers) As at 31.12.2018
A successful management and communication style is set out in the Swiss Life Group’s people leadership competencies. Management and communication mean in day-to-day work the creation of credibility and trust, providing direction and perspective, and making goals reality together.
Swiss Life’s management processes in overview: – Performance reviews with all employees – Performance assessments with all employees (setting of objectives and assessment) – Professional development interviews and measures – Decisions on salaries and promotions – Strategy and value-oriented behaviour – as per the Group-wide competency model – Assessment and management of employee risks
Since 2016, Swiss Life has been publicly committed to the issue of a “self-determined life”. As part of this commitment, the company has been running its “Actively shaping your career” campaign over the past three years. The initiative aims to support employees as they optimally steer their professional lives throughout all phases of their career. To this end, three success factors have been identified: “Ensuring employability through constant development”, “Valuing and exploiting diversity” and “Maintaining long-term work ability”. These three focuses will ensure that employees’ individual resources are enhanced while at the same time various operational demands and personal requirements are taken into account and harmonised with one another during the various phases of an employee’s professional and personal life. That is how Swiss Life meets the current and future challenges of the working world. By the end of 2018, all of the initiative ’s measures had been implemented according to plan at the Swiss location, and implementation is also well under way in the divisions. The measures include: “Ensuring employability through constant development” – Continuous training and development for employees of all ages – Systematic career analyses and situation reviews for employees of all ages – Enabling part-time work in old age
Swiss Life continuously invests in the internal and external training and development of its employees. True to the principle of lifelong learning, employees, specialists and managers are offered learning opportunities on specialist topics, enhanced by modules on social and methodological skills.
Young employees with potential have the opportunity to undertake all sorts of vocational courses, apprenticeships, placements, graduate programmes and combined university degrees. An average of around 350 employees (apprentices and trainees) take part in the courses offered every year. The Swiss Life Group employs this measure to help ensure its future management and professional requirements. The rate of transfers to a continuing employment relationship is 80% on average.
Expenses for training and development within the Group amount on average to CHF 28 million (including around CHF 9.5 million for staff in training), or some CHF 2080 per employee annually. As a proportion of staff costs, the outlay for training and development is approximately 2%. The investment is earmarked for a varied, needs-based training offering.
Swiss Life employs a number of specialists with great sector-specific knowledge and ability. Both managers and specialists are of prime importance to the corporate success of Swiss Life.
Switzerland Swiss Life Switzerland – The agreement concerning simplified recording of working hours, which entered into force on 1 April 2016, was formally confirmed at the annual review and will be continued. – In 2018 the staff committee continued to work on various sub-projects of the “Actively shaping your career” initiative.
Proportion of paper with FSC label (in %) 66 63 60
GRI 102-10 Significant changes to the organisation and its supply chain p. 41
Workforce absences employees, total 3.2% 3.1% 2.8% 2.7% AR, p. 125
Stated commitment to Board diversity yes yes yes yes AR, p. 34–40
Net gains/losses on financial instruments at fair value through profit or loss 5, 8 415 –1 181
Intangible assets including intangible insurance assets 17 3 135 2 931
Investment contracts with and without discretionary participation features For investment contracts that contain discretionary participation features (see below), the same recognition and measurement principles as for insurance contracts apply. For investment contracts without discretionary participation features, the recognition and measurement rules for financial instruments apply.
Net gains/losses on financial assets –754 33 232 6 0 –26 –509 – –509
Disability income and other annuities – deferred 15 906 15 582
The sensitivity analysis with regard to insurance risk is as follows.
Liabilities linked to assets for the account and risk of the Swiss Life Group’s customers 2 164 –1 065
Change in liability for future life policyholder benefits, gross 2 489 1 768
BALANCE AS AT END OF PERIOD 16 8 15 18 31 26
Gains (+)/losses (–) recognised in profit or loss (including impairment) 18 –1
On 22 October 2012, Swiss Life Ltd issued subordinated perpetual callable bonds in the amount of CHF 300 million. The bonds were guaranteed by Swiss Life Holding, had no fixed maturity date and were first callable on 22 August 2018 or at each interest payment date thereafter at the option of the issuer, upon notice and subject to the consent of the Swiss Financial Market Supervisory Authority. The interest was fixed at 5.50% p.a. until 22 August 2018. The bonds were redeemed on the first call date on 22 August 2018.
Swiss Life AG EUR 750 EUR 750 4.375% 2015 2025 834 866
Claims under life insurance contracts 6 203 6 219 90 88 6 113 6 131 of which for the account and risk of the Swiss Life Group’s customers 5 905 5 462 – – 5 905 5 462
Certain subsidiaries sponsor various defined contribution plans. Participation in the various plans is based either on completion of a specific period of continuous service or on the date of hire. The plans stipulate contributions by both employers and employees. The expenses under these plans amounted to CHF 2 million in 2018 (2017: CHF 1 million).
In 2018, a distribution to shareholders out of the capital contribution reserve of CHF 460 million (CHF 13.50 per registered share) was made (2017: CHF 356 million, CHF 11.00 per registered share).
NET BALANCE AS AT END OF PERIOD –1 012 2 791 348 –10 2 117 68 –301 – –232 1 885
On 22 March 2018, Swiss Life Ltd issued subordinated perpetual callable bonds in the amount of CHF 425 million. The bonds are guaranteed by Swiss Life Holding, have no fixed maturity date and are first callable on 25 September 2024 or at each interest payment date thereafter at the option of the issuer, upon notice and subject to the consent of the Swiss Financial Market Supervisory Authority. The interest has been fixed at 2.00% p.a. until 25 September 2024. If the bonds are not redeemed on 25 September 2024, the interest resets at a rate fixed for the subsequent five years, consisting of the aggregate of the then-prevailing five-year CHF swap rate and the initial margin of 1.842% p.a. The bonds are accounted for as equity, the issuance costs of CHF 3 million and the interest of CHF 4 million are accounted for as a deduction from equity.
Investment contracts without discretionary participation – – 514 383 – – 514 383
The Group has entered into various operating leases as a lessee. Rental expenses for these items totalled CHF 53 million for the year ended 31 December 2018 (2017: CHF 48 million). Minimum lease payments totalled CHF 53 million in 2018 (2017: CHF 48 million).
Securities received as collateral in exchange for securities lent 3 861 5 516
BEOS Fixture GmbH, Berlin AM from 30.08.2018 100.0% 100.0% Asset management & Real estate
CORPUS SIREO Projektentwicklung München GmbH, Köln AM 99.9% 100.0% Asset management & Real estate
SL Beteiligungs-GmbH & Co. Immobilien V KG, Garching b. München DE 100.0% 100.0% Real estate
We chose profit before tax and policyholder participation as the benchmark because, in our view, it is a prevailing indicator for the performance of the Group as it is free from management's decisions regarding profit allocation and thus, more representative of the Group's activities.
Contingent liabilities Swiss Life Holding acts as warrantor for all Swiss Life Ltd liabilities with regard to the various tranches of the subordinated perpetual step-up loans (hybrid debt), which amounted to an equivalent value of CHF 4220 million at the balance sheet date.