Swiss Life grows in premiums and fee income
Published: Wednesday, Nov 8th 2023, 08:20
Updated At: Thursday, Nov 9th 2023, 00:54
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In the first nine months of the year, life insurer Swiss Life benefited from further growth abroad and increased income from fees and commissions. Premium income has also continued to rise in the year to date. Accordingly, the financial group considers itself to be on track with its targets.
Fee business, which includes income from financial advisory services, asset management for pension funds and the sale of investment-linked pension products, increased by 3 percent to CHF 1.79 billion in the first nine months of the year, as Swiss Life announced on Wednesday. This corresponds to growth of 5 percent in local currencies.
The growth in fee income was mainly due to the foreign insurance segments. In contrast, fee income in Switzerland declined slightly (-1%) and fell significantly, particularly in Asset Management (-9%). In Germany and France, fee income in euros increased by 15% in each case.
Tailwind from Elipslife
The Group's premium income also rose by 3% to CHF 15.5 billion in the first nine months, an increase of 5% in local currencies. Premium growth in the home market of Switzerland was below average (+2%).
Rapid growth in the International market unit (+63%), where the Group continued to benefit from the integration of Elipslife, which was acquired from Swiss Re in the previous year, continued to support premiums. There was also premium growth in Germany, while premiums in France developed negatively due to a decline in life business.
Real estate markets slow down
Asset Management recorded net new money inflows of CHF 8.4 billion in business for third-party clients (Third Party Asset Management TPAM) after CHF 6.0 billion in the same period of the previous year. Overall, TPAM assets under management have climbed by around 6 percent to CHF 112.2 billion since the beginning of the year.
However, the asset management unit generated significantly lower fee income than in the same period of the previous year. This was partly due to the sale of a subsidiary in the fourth quarter of 2022, but income was also held back by "subdued real estate markets" and currency effects.
Swiss Life benefited from direct investment income of CHF 2.99 billion (prior-year period: CHF 2.88 billion). The non-annualized direct investment return improved from 1.8% in the previous year to 2.1%.
However, the capital cushion was reduced: the insurer estimated the SST ratio at 205% at the end of September (beginning of 2023: 215%). However, it remains above its strategic ambition of 140 to 190 percent.
Normalization expected
Swiss Life's nine-month results are below analysts' expectations, particularly in terms of premium income. The majority of experts had also expected new money in Asset Management to be higher.
The financial group assumes that the cycle of rising interest rates will come to an end and that the real estate markets will normalize over the course of next year, Group CEO Patrick Frost is quoted as saying in the press release. With the "Swiss Life 2024" corporate program, the company is still well on track to "achieve or exceed all of the Group's financial targets".
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