Swiss Life enters the final spurt in the three-year program
Published: Tuesday, Sep 3rd 2024, 13:50
Back to Live Feed
Swiss Life is heading towards the end of its three-year strategy program with vigour. The financial group increased its results in the first half of 2024 and is likely to exceed most of its targets. Shareholders can look forward to the next dividend increase.
Operating profit climbed by 6 percent to 883 million francs in the first half of the year, while net profit was slightly up on the previous year at 632 million, as the Group announced on Tuesday. However, if the release of a tax provision recorded in the previous year is excluded, profit would also have risen by more than 5 percent.
Group CEO Matthias Aellig attributed this primarily to the good performance in the fee business. In the fee business, income rose by 5 percent and the result by 15 percent thanks to good demand for investment-linked pension solutions in France and asset management activities for institutional clients.
It was precisely this area that had slowed Swiss Life's rise somewhat. Real estate transactions and project developments in Germany and France in particular had weakened in the wake of the rise in interest rates. Aellig has recently observed a normalization in this respect.
Few worries ahead of SNB vote
Swiss Life also made gains in the insurance business. Gross premiums written increased by 2% to CHF 11.7 billion, supported by slight growth in the Swiss domestic market. Meanwhile, assets under management for semi-autonomous pension solutions for companies rose further to CHF 7.6 billion at the end of June.
The vote on the BVG reform on September 22 is of little concern to Aellig from Swiss Life's perspective. The Group plans and finances the pension provision for its customers with foresight and the benefit promises are secured regardless of the outcome of the vote, he noted.
Nevertheless, a "yes" is important for the Swiss pension system based on its three pillars, continued Aellig. "We are envied internationally for this system and must take care of it." The federal government wants to financially stabilize the second pillar with various measures, such as lowering the conversion rate for calculating pension payments.
On target
Meanwhile, Swiss Life believes it is on track with the Group targets set for the end of 2024. The return on equity (10-12 percent) and the dividend payout ratio (over 60 percent) are likely to be exceeded. And the lower end of the corridor of CHF 850 to 900 million is still being targeted for the fee result.
"We are well on track to fulfill the ambition of further dividend increases," said CFO Marco Gerussi in a conference call. In addition to rising profits and the SST capital ratio, which remains very solid at an estimated 205%, this is also supported by the high cash transfers from the operating units to the holding company.
Swiss Life communicates new targets for the next three years at an investor meeting at the beginning of December. According to analysts, the Group is likely to stick to the basic orientation of its business.
There will be a change to the Executive Board in April. Stefan Mächler, Head of Investment for many years, who played a key role in the expansion of the fee business, is retiring. He will be succeeded by Per Erikson. He has worked at Swiss Life since 2007 and has been a member of the Executive Board of Swiss Life Asset Managers since 2015.
©Keystone/SDA
English 
German 
French 
Spanish 
Arabic