insurance switzerland — Swiss Life in Switzerland posted a segment result of CHF 488 million for 2010, an increase of 4% on the previous year. This increase is particularly pleasing bearing in mind the low interest rate environment, a collapse in the value of key currencies, and the strong pressure on margins in the life business.

The good result was driven on the one hand by previously implemented efficiency measures, and on the other by long-term initiatives such as the restructuring of risks on the investment side, the strengthening of the multichannel distribution strategy, and the sustainable reduction of costs. The financial result was maintained at a high level of CHF 2.5 billion, a decline of around 7% on the previous year. Although direct investment income increased by 5% to CHF 2.8 billion, negative currency effects led to an overall decrease in the financial result. This is more than compensated by the foreign currency gain of CHF 396 million in hybrid capital, which was entered under other income.

According to the Swiss Insurance Association (SIA), premiums in the Swiss life insurance market increased by 2% to CHF 28.5 billion. Premiums rose by 5% in group insurance while declining by 6% in individual insurance. Overall, Swiss Life was able to increase its premium volume by 2% to CHF 7.6 billion, thereby matching the growth of the market. Occupational benefits insurance contributed 79% of premium income, a rise of 4% on the previous year. The market share in group insurance fell slightly to 29.2%. In individual insurance, premium income fell by 7%; the market share amounted to 19.5%. In the year under review, the sale of products through AWD (as measured on the basis of production volume) rose slightly to CHF 197 million.

Operating expenses declined by 11% to CHF 765 million. The actual reduction in costs amounted to 8% after adjustment for a positive one-off effect arising from the Swiss Life pension fund changeover from a defined benefit system to a defined contribution system in 2010. This further reduction in costs is the consequence of a sustainable efficiency programme that is yielding results in staff and advisor costs in particular. At the same time, investment has been channelled into the future: The main areas of focus include distribution and the new, efficient IT platform in group insurance.

Insurance benefits, including changes in insurance reserves, increased by 9% to CHF 8.6 billion. This rise is primarily attributable to the increased need for reserves for future risks and to the higher premiums (savings deposits). The higher insurance reserves are also the reason for the significantly lower allocation to reserves for policyholder bonuses.

The new products launched in 2010 were a key driver of premium growth, as well as ensuring the continued increase in the share of business generated with modern life and pensions solutions and risk products, together with healthy sales via the AWD distribution channel. In the area of individual insurance, Swiss Life launched its unit-linked life and pensions solutions Swiss Life Champion Uno and Swiss Life Champion Timeplan in the first semester. Since the second semester, the spectrum of products has also included Swiss Life Premium Select, a non-tax-qualified (pillar 3b) unit-linked life insurance product. In addition, Swiss Life also launched a savings product especially for children and a pure risk insurance solution for customers who prefer an online solution. For corporate clients, Swiss Life launched Swiss Life Business Invest in the first semester, an attractive life and pensions solution with a modern investment concept.

Swiss Life is looking to grow further in 2011 too, with an even stronger focus on the client. The service mentality is to be enhanced and response times accelerated. Further innovations in relation to products and marketing will follow. The acquisition of the group life portfolio of Nationale Suisse, announced in January 2011, will contribute further to the profitable growth of Swiss Life thanks to the realisation of economies of scale. Moreover, the two partners are signing a distribution cooperation agreement. Swiss Life will continue to strive for efficiencies and will undertake additional optimisations to increase both distribution capabilities and profitability.

Key figures for insurance switzerland
Amounts in CHF million  
  2010 2009 +/–
Gross written premiums, policy fees and deposits received
  7 631 7 518 1.5%
Net earned premiums and policy fees
  7 365 7 288 1.1%
Commission income
  18 31 –41.9%
Financial result
  2 512 2 704 –7.1%
Other income
  487 103 n/a
Total income
  10 382 10 126 2.5%
Net insurance benefits and claims
  –8 609 –7 887 9.2%
Policyholder participation
  –429 –806 –46.8%
Interest expense
  –91 –106 –14.2%
Operating expense
  –765 –860 –11.0%
Total expense
  –9 894 –9 659 2.4%
Segment result
  488 467 4.5%
Assets under control
  79 014 73 841 7.0%
Insurance reserves
  67 599 65 406 3.4%
Number of employees (full-time equivalents)
  2 217 2 489 –10.9%