4 Segment Information

Operating segments are components of an entity about which separate financial information is available that is evaluated regularly by management (corporate executive board) in deciding how to allocate resources and in assessing performance.

The accounting policies for the segments are the same as those described in the Summary of Significant Accounting Policies section. Inter-segmental services and transfers of assets and liabilities are treated as if the transactions were with third parties, i.e. at market prices applicable at the time of the transaction.

Corporate costs were not allocated to the individual segments as they consist of general administrative expenses and head office expenses that relate to the Swiss Life Group as a whole.

The reportable segments have been identified based on information about the components of the entity that management uses to make decisions about operating matters. The reportable segments in these financial statements reflect the management structure that was in place until the end of 2012. With the implementation of the new strategic group-wide programme in 2013, the management structure and the reportable segments were adjusted accordingly. The corresponding information for the statement of income for the year ended 31 December 2012 and the balance sheet as at 31 December 2012 will be restated for the 2013 consolidated financial statements.

The business is managed based on IFRS results.

The information provided to management focuses on product lines and services. The organisational and management structure within the insurance business is geographical. The reportable segments have therefore been identified as follows:

Insurance Switzerland
Insurance France
Insurance Germany
Insurance International
Investment Management
AWD
Other

The insurance segments primarily consist of life insurance operations. These operations offer a broad range of life, pension, annuity and investment-type policies to both groups and individuals, including disability coverage. The Group’s strategy focuses primarily on life and pensions in Switzerland, France and Germany and on cross-border business from Liechtenstein, Luxembourg, Singapore and Dubai. The insurance segments also include a number of companies which hold investments primarily pertaining to life insurance.

“Insurance International” comprises the cross-border insurance operations in Liechtenstein, Luxembourg, Singapore and Dubai.

Non-life operations involve operations in France and Luxembourg and mainly include property and casualty, liability and motor insurance, accident and health insurance, and payment protection insurance. These operations are included in the segments “Insurance France” and “Other”.

“Investment Management” refers to the management of assets for institutional clients and the Group’s insurance business, as well as the provision of expert advice for such clients.

“AWD” comprises the Hanover-based AWD Group, which specialises in comprehensive financial advisory services for medium and high-income client segments.

“Other” refers principally to various finance and service companies, as well as payment protection insurance.

The statement of income and the balance sheet for the segments are provided in the following pages:
Statement of income for thE Year ENDED 31 December 2012
In CHF million  
 
Insurance
Switzer-
land


Insurance
France


Insurance
Germany

Insurance
Inter-
national
Invest-
ment
Manage-
ment



AWD



Other
Total
before
elimi-
nations


Elimi-
nations



Total
 
Income
 
Premiums earned on insurance contracts
  7 166 2 719 1 541 45 1 11 473 –87 11 385
Premiums earned on investment contracts with discretionary participation
  661 661 661
Premiums ceded to reinsurers
  –25 –194 –35 –8 –1 –263 87 –175
Net earned premiums
  7 802 2 525 1 506 37 1 11 871 0 11 871
Policy fees earned on insurance contracts
  16 19 0 36 36
Policy fees earned on investment and unit-linked contracts
  50 105 37 81 273 273
Net earned policy fees
  66 125 37 81 309 309
Commission income
  34 78 35 12 338 583 60 1 140 –314 826
Investment income
  2 954 651 652 32 1 2 49 4 341 –45 4 297
Net gains/losses on financial assets
  515 12 169 85 0 –2 –3 776 776
Net gains/losses on financial instruments at fair value through profit or loss
  411 200 50 –84 1 2 580 580
Net gains/losses on investment property
  366 15 9 0 390 390
Other income
  30 4 1 0 0 2 1 39 –13 25
Total income
  12 177 3 610 2 460 163 339 587 110 19 446 –372 19 075
of which inter-segment
  103 –49 –8 –10 211 33 92 372 –372
 
Expenses
 
Benefits and claims under insurance contracts
  –9 378 –2 139 –1 722 –19 1 –13 257 44 –13 214
Benefits and claims under investment contracts with discretionary participation
  –685 –685 –685
Benefits and claims recovered from reinsurers
  15 104 13 1 –9 123 –44 79
Net insurance benefits and claims
  –10 048 –2 035 –1 709 –18 –9 –13 819 –1 –13 819
Policyholder participation
  –455 –311 –334 –15 0 –1 115 11 –1 104
Interest expense
  –69 –156 –13 –16 0 –2 –1 –257 4 –253
Commission expense
  –327 –334 –79 –27 –41 –375 –3 –1 187 316 –871
Employee benefits expense
  –286 –192 –80 –54 –112 –102 –6 –833 1 –831
Depreciation and amortisation expense
  –250 –269 –125 –5 –2 –31 –3 –685 –685
Impairment of property and equipment and intangible assets
  –7 –2 –17 –578 –604 –604
Other expenses
  –101 –154 –48 –45 –46 –91 –13 –498 –1 –499
Total expenses
  –11 543 –3 453 –2 390 –197 –201 –1 179 –35 –18 998 331 –18 667
of which inter-segment
  –262 14 –56 –15 –14 6 –4 –331 331
 
Segment result
  634 157 69 –34 138 –591 75 448 –41 407
of which inter-segment
  –159 –35 –64 –26 197 39 88 41 –41
 
Unallocated corporate costs
  –61
Result from operations
  346
Borrowing costs
  –148 0 –4 –5 –9 –166 41 –125
Share of profit or loss of associates
  3 3 0 1 1 8 8
Income tax expense
  –137
Net result
  93
 
Additions to non-current assets
  818 177 62 3 3 7 1 1 073 1 073


Statement of income for the Year ended 31 December 2011
In CHF million  
 
Insurance
Switzer-
land


Insurance
France


Insurance
Germany

Insurance
Inter-
national
Invest-
ment
Manage-
ment



AWD



Other
Total
before
elimi-
nations


Elimi-
nations



Total
 
Income
 
Premiums earned on insurance contracts
  7 056 2 514 1 620 44 35 11 269 –164 11 105
Premiums earned on investment contracts with discretionary participation
  673 12 685 685
Premiums ceded to reinsurers
  –33 –283 –22 –7 –17 –362 171 –191
Net earned premiums
  7 696 2 243 1 598 37 18 11 592 7 11 599
Policy fees earned on insurance contracts
  16 23 0 39 39
Policy fees earned on investment and unit-linked contracts
  45 108 20 83 256 256
Net earned policy fees
  61 131 20 83 295 295
Commission income
  19 93 34 13 301 692 42 1 194 –301 893
Investment income
  2 876 658 651 30 1 2 29 4 247 –31 4 216
Net gains/losses on financial assets
  361 45 142 34 0 –2 –30 550 550
Net gains/losses on financial instruments at fair value through profit or loss
  –615 –81 –75 –34 1 –16 –820 –820
Net gains/losses on investment property
  399 105 9 0 513 513
Other income
  43 1 2 –1 0 5 8 58 –13 45
Total income
  10 840 3 195 2 381 162 302 698 51 17 629 –338 17 291
of which inter-segment
  181 –139 1 –15 195 53 62 338 –338
 
Expenses
 
Benefits and claims under insurance contracts
  –8 287 –2 055 –1 782 –20 –1 –12 145 137 –12 008
Benefits and claims under investment contracts with discretionary participation
  –696 –13 –709 –709
Benefits and claims recovered from reinsurers
  19 221 6 1 0 247 –144 103
Net insurance benefits and claims
  –8 964 –1 847 –1 776 –19 –1 –12 607 –7 –12 614
Policyholder participation
  –450 –102 –237 –14 2 –801 10 –791
Interest expense
  –77 –168 –15 –15 0 –1 0 –276 2 –274
Commission expense
  –313 –363 –69 –29 –29 –474 –8 –1 285 302 –983
Employee benefits expense
  –268 –187 –81 –55 –101 –105 –7 –804 0 –804
Depreciation and amortisation expense
  –185 –237 –89 –5 –1 –34 –3 –554 –554
Impairment of property and equipment and intangible assets
  –6 –2 –3 –11 –11
Other expenses
  –101 –167 –54 –35 –41 –94 –17 –509 2 –507
Total expenses
  –10 364 –3 071 –2 323 –172 –172 –711 –34 –16 847 309 –16 538
of which inter-segment
  –336 131 –64 –20 –14 0 –6 –309 309
 
Segment result
  476 124 58 –10 130 –13 17 782 –29 753
of which inter-segment
  –155 –8 –63 –35 181 53 56 29 –29
 
Unallocated corporate costs
  –54
Result from operations
  699
Borrowing costs
  –129 0 –5 –6 –9 –149 29 –120
Share of profit or loss of associates
  1 3 0 0 2 6 6
Income tax expense
  21
Net result
  606
 
Additions to non-current assets
  1 232 144 126 4 14 3 4 1 527 1 527


Balance sheet as at 31 December 2012
In CHF million  
 
Insurance
Switzer-
land


Insurance
France


Insurance
Germany

Insurance
Inter-
national
Invest-
ment
Manage-
ment



AWD



Other
Total
before
elimi-
nations


Elimi-
nations



Total
 
Assets
 
Cash and cash equivalents
  2 565 495 213 2 850 109 119 130 6 481 0 6 480
Derivatives
  1 355 204 102 1 1 1 663 –27 1 636
Assets held for sale
 
Financial assets at fair value through profit or loss
  2 715 7 966 994 15 438 13 58 27 183 27 183
Financial assets available for sale
  58 671 14 821 6 365 990 35 294 81 176 81 176
Loans and receivables
  14 646 1 861 9 956 96 149 209 1 359 28 276 –2 788 25 488
Financial assets held to maturity
 
Financial assets pledged as collateral
  964 964 964
Investment property
  13 505 1 789 928 3 16 225 16 225
Reinsurance assets
  30 376 34 2 14 456 –87 369
Property and equipment
  238 48 87 0 3 42 16 433 433
Intangible assets including intangible insurance assets
  589 458 1 248 157 12 422 7 2 893 2 893
Other assets
  401 35 1 2 25 2 1 466 –90 376
Segment assets
  94 715 29 017 19 926 19 536 333 805 1 882 166 215 –2 992 163 223
Investments in associates
  87
Income tax assets
  90
Total assets
  163 400
 
Liabilities and equity
 
Liabilities
 
Derivatives
  815 15 9 0 27 866 –27 839
Liabilities associated with assets held for sale
 
Financial liabilities at fair value through profit or loss
  1 943 592 567 18 061 21 162 21 162
Investment contracts
  1 733 9 140 36 644 11 553 11 553
Other financial liabilities
  4 289 3 059 581 181 20 208 175 8 513 –791 7 722
Insurance liabilities
  68 097 12 590 16 652 200 44 97 583 –110 97 474
Policyholder participation liabilities
  5 635 1 596 1 125 21 0 8 378 –2 8 376
Employee benefit liabilities
  1 053 79 42 6 47 1 1 227 1 227
Provisions
  26 13 7 29 5 106 0 188 188
Other liabilities
  136 94 11 6 2 48 1 299 –24 274
Segment liabilities
  83 727 27 179 19 030 19 148 75 362 248 149 768 –954 148 814
Borrowings
  2 768
Income tax liabilities
  1 532
Equity
  10 286
Total liabilities and equity
  163 400


Balance sheet as at 31 December 2011
In CHF million  
 
Insurance
Switzer-
land


Insurance
France


Insurance
Germany

Insurance
Inter-
national
Invest-
ment
Manage-
ment



AWD



Other
Total
before
elimi-
nations


Elimi-
nations



Total
 
Assets
 
Cash and cash equivalents
  1 130 898 129 2 545 85 87 210 5 084 0 5 084
Derivatives
  1 087 163 70 11 8 1 339 –21 1 318
Assets held for sale
  22 22 22
Financial assets at fair value through profit or loss
  2 262 6 911 915 13 965 10 57 24 120 24 120
Financial assets available for sale
  49 556 11 276 5 150 837 32 413 67 264 67 264
Loans and receivables
  15 645 1 650 10 098 52 149 226 873 28 693 –1 491 27 202
Financial assets held to maturity
  3 716 1 304 26 5 046 5 046
Financial assets pledged as collateral
  969 969 969
Investment property
  12 921 1 619 902 3 15 445 15 445
Reinsurance assets
  40 385 26 1 27 479 –99 380
Property and equipment
  271 124 79 1 2 46 16 539 539
Intangible assets including intangible insurance assets
  698 484 1 314 177 12 1 028 9 3 722 3 722
Other assets
  571 34 1 2 27 2 1 638 –103 535
Segment assets
  87 897 25 839 18 710 17 591 307 1 399 1 617 153 360 –1 714 151 646
Investments in associates
  74
Income tax assets
  155
Total assets
  151 875
 
Liabilities and equity
 
Liabilities
 
Derivatives
  1 083 30 73 0 21 1 207 –21 1 186
Liabilities associated with assets held for sale
  15 15 15
Financial liabilities at fair value through profit or loss
  1 469 566 453 16 294 18 782 18 782
Investment contracts
  1 413 9 356 21 568 11 358 11 358
Other financial liabilities
  3 932 2 686 502 162 30 241 377 7 930 –705 7 225
Insurance liabilities
  65 716 11 335 16 187 194 53 93 485 –120 93 365
Policyholder participation liabilities
  4 228 295 609 20 0 5 152 –2 5 150
Employee benefit liabilities
  1 107 65 41 6 41 1 1 261 1 261
Provisions
  22 21 10 10 5 81 1 150 150
Other liabilities
  257 38 3 4 6 52 1 361 –28 333
Segment liabilities
  79 227 24 407 17 899 17 258 82 374 454 139 701 –876 138 825
Borrowings
  2 624
Income tax liabilities
  1 264
Equity
  9 162
Total liabilities and equity
  151 875


Premiums and policy fees from external customers
In CHF million  
  Net earned premiums Net earned policy fees
  2012 2011 2012 2011
 
Life
 
Individual life
  3 757 3 620 300 287
Group life
  7 726 7 584 8 8
Total life
  11 483 11 204 309 295
 
Non-life
 
Accident and health
  14 13
Property, casualty and other
  374 382
Total non-life
  388 395
 
Total
  11 871 11 599 309 295


The Swiss Life Group operates in selected countries. The Group’s income and non-current assets by geographical location are detailed below:

In CHF million  
  Total income Non-current assets
  2012 2011 31.12.2012 31.12.2011
Switzerland
  12 195 10 792 13 828 13 305
France
  3 669 3 342 2 176 2 077
Germany
  2 815 2 784 1 762 2 336
Liechtenstein
  40 47 149 169
Luxembourg
  188 176 62 57
Other countries
  168 150 4 4
Total
  19 075 17 291 17 982 17 948


Non-current assets for this purpose consist of investment property, property and equipment and intangible assets (except for intangible assets arising from insurance contracts).

information about major customers
No revenue from transactions with a single external customer amounted to 10% or more of the Group’s revenue.

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