Financial Data and Key Metrics Changes - Adjusted profit from operations increased by 17% to more than CHF 2 billion, while net profit rose by 16% to over CHF 1.4 billion [5][12] - Return on equity was 12.8%, exceeding the target range of 10% to 12% [5] - Cash remittance increased by 21% to slightly more than CHF 1 billion [6][57] - Proposed dividend increased by 20% to CHF 30 per share, with a payout ratio of slightly more than 60% [6][58] Business Line Data and Key Metrics Changes - In Switzerland, gross written premiums were stable at CHF 9.9 billion, with individual life premiums down by 4% to CHF 1.5 billion [14] - Premiums in group life increased by 1% to CHF 8.4 billion, while single premiums rose by 2% [15] - In France, premiums decreased by 3% to €6.9 billion, with life business premiums down by 5% [20][21] - In Germany, premiums increased by 5% to €1.4 billion, driven by modern traditional and disability products [26] - International segment premiums rose by 21% to €1.3 billion, largely due to the acquisition of elipsLife [30] Market Data and Key Metrics Changes - The market for individual life in Switzerland grew by 2%, while Swiss Life's individual life premiums decreased [14] - In France, the life net inflows were €2.5 billion, outperforming the total market net inflows of €14.3 billion [21] - The P&C premiums in France decreased by 4%, primarily due to motor and home insurance products [22] Company Strategy and Development Direction - The company aims to structurally exceed its cumulative cash remittance target, which is crucial for growing dividends [9] - The focus remains on cash remittance and the transition to IFRS 17, with a separate call planned to discuss this topic [9] - The company is well-positioned to achieve or exceed all group financial targets as part of the Swiss Life 2024 corporate program [10][59] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the benefits of higher interest rates for both the company and policyholders, expecting positive effects to materialize over time [6][60] - The company anticipates further reserve releases due to higher interest rates, which will contribute to growing cash remittance in 2023 and beyond [8][64] - Economic fundamentals in Switzerland remain strong, supporting the resilience of the real estate portfolio [47][48] Other Important Information - The share of government bonds in the investment portfolio declined, while the share of corporate bonds increased [45] - Unrealized net gains on equities decreased to CHF 1.5 billion, while unrealized net losses on bonds amounted to CHF 7.9 billion [44] - The company achieved net new assets in the TPAM business amounting to CHF 9.8 billion, up from CHF 9.4 billion [39] Q&A Session Summary Question: Holding company cash levels and pro forma cash figure for buyback completion - Management confirmed that the holding company cash figure was CHF 0.8 billion at year-end, currently at about CHF 0.85 billion [68] Question: Insights on real estate and future net additions - Management indicated that negative net additions were due to timing effects, and they expect some net additions in 2023 [65][69] Question: Future reserve releases and dividend sustainability - Management stated that approximately 30% of the CHF 9 billion reserve strengthening over the past decade was outside the BVG business, with CHF 300 million released this year [72] Question: Sensitivity to interest rates and asset management flows - Management noted that higher rental income and reinvestment rates will contribute positively to cash remittance, with strong inflows expected in various asset classes [78][80] Question: Real estate development results and pipeline - Management expressed confidence in the repeatability of strong real estate development results, supported by ongoing demand and lower vacancy rates in Switzerland [86][89]
Swiss Life(SZLMY) - 2023 Q4 - Earnings Call Transcript