insurance switzerland — In the year under review Swiss Life in Switzerland posted a promising segment result of CHF 476 million (2010: CHF 491 million) . The 3% decline over the previous year can be attributed to a one-off effect in 2010 resulting from the conversion of its own pension fund, as well as to higher acquisition costs caused by an increase in new business. This result is all the more remarkable in view of the enduring low interest rate environment, the decline in the value of key currencies and the high margin pressure in life insurance.

Long-term initiatives, such as the continued reduction of risks on the investment side, the multichannel strategy implemented for distribution and the renewed sustained cost reduction made a major contribution to the solid result. The financial result increased to CHF 3 billion and direct investment income rose 4% to CHF 2.9 billion.

According to the Swiss Insurance Association (SIA) Swiss Life insurance premiums rose by 4% over the previous year to CHF 29.8 billion. Premiums in group insurance rose by 6% and in individual insurance fell by 0.4%. Swiss Life grew overall premium volume by 6% to CHF 8.1 billion. Occupational pension provision accounted for 81% of income, which was 2% higher than the previous year. Swiss Life’s market share of group insurance remained at 29.2%, and in individual insurance it was 19.8%. In the year under review, the sale of products through AWD (as measured on the basis of production volume) almost doubled reaching CHF 386 million.

Operating expenses rose by 16% to CHF 873 million in 2011. This can be attributed to the positive one-off effect in 2010 resulting from the Swiss Life pension fund changeover from a defined benefit system to a defined contribution system, as well as to higher acquisition costs caused by the increase in new business in 2011. The further reduction in administrative costs is the result of a sustained efficiency programme, which mainly impacted staff and advisor costs.

Insurance benefits, including changes in insurance reserves, increased by 4% to CHF 9.0 billion. This rise is primarily attributable to the increased need for reserves for future risks and to the higher premiums (savings deposits).

The products launched in 2011 are a key driver of premium growth in own and third-party distribution channels: In individual insurance Swiss Life launched two additional tranches for Swiss Life Premium Select, a non-tax-qualified (pillar 3b) unit-linked life insurance product. The holding account, a temporary account with a variable interest rate, was introduced in the first quarter. In the second semester the capitalisation product Swiss Life Classic Midterm offering was extended. Swiss Life Classic Crescendo Duo, a combined pillar 3a and 3b savings product, was launched in the third quarter. In the second semester Swiss Life launched the product Swiss Life Business Invest complementary occupational benefits, an attractive pension solution with a modern investment concept for members of management, which targets Swiss corporate clients. In the area of full insurance the product Swiss Life Business Protect complementary occupational benefits was launched for members of management.

Swiss Life wants to develop in Switzerland from a pure life insurer into an all-round financial protection provider and accordingly embarked on a programme in 2011, that will be implemented from 2012. The programme is built on closer and more regular client interaction and the development of our service activities. Swiss Life also wants to enhance its efficiency and make further improvements to increase its distribution capacity and profitability.

Key figures for insurance switzerland
Amounts in CHF million  
  2011 2010 +/–
Gross written premiums, policy fees and deposits received
  8 123 7 631 6.4%
Net earned premiums and policy fees
  7 757 7 365 5.3%
Commission income
  19 7 n/a
Financial result
  3 021 2 512 20.3%
Other income
  43 487 –91.2%
Total income
  10 840 10 371 4.5%
Net insurance benefits and claims
  –8 964 –8 609 4.1%
Policyholder participation
  –450 –429 4.9%
Interest expense
  –77 –91 –15.4%
Operating expense
  –873 –751 16.2%
Total expense
  –10 364 –9 880 4.9%
Segment result
  476 491 –3.1%
Assets under control
  85 604 79 014 8.3%
Insurance reserves
  72 826 67 599 7.7%
Number of employees (full-time equivalents)
  1 995 2 168 –8.0%


 

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