Swiss Life posts record net profit in 2007

The company made a record profit in its anniversary year Keystone

Switzerland's largest life insurance company, Swiss Life, has reported a 43 per cent increase in net profit last year to SFr1.368 billion ($1.38 billion).

The company, which last year celebrated its 150th anniversary, reported that its premium volume had risen by ten per cent to SFr24.2 billion.

The board of directors of Swiss Life is to propose a SFr10 increase in the dividend from the previous year’s SFr7 to SFr17. As in previous years, the dividend would take the form of a reduction in the shares’ nominal value.

A statement from the company’s headquarters in Zurich said that in its anniversary year the Swiss Life Group posted the best result of its history despite turbulence on the financial markets.

It added that after allowing for minority interests, a profit of SFr1.345 billion could be allocated to shareholders, translating into earnings per share of SFr39.6 and a return on equity of 18.1 per cent.

Profit was boosted by a SFr304 million one-off gain from a reserve release following a change of law in the Netherlands.

The company said it saw little impact from any possible further credit writedowns as a result of the United States subprime mortgage crisis.

“This is definitely a good result, above consensus, and paves the way for what Swiss Life expects to achieve in its targets,” commented analyst Viktor Dammann at Bank Vontobel in Zurich.

Operational advances

“In 2007, we again made great progress and already achieved our targets originally set for 2008. Thanks to our operational advances and having set the strategic course, we are well positioned for the next growth surge,” commented Swiss Life chief executive Rolf Dörig.

Swiss Life went through a state of divestments at the end of last year, selling its Belgian and Dutch operations as well as the Banca del Gottardo banking business.

With part of the money, it acquired Germany’s largest independent financial operator AWD for about SFr2 billion, saying the move marked the beginning of international expansion.

The Swiss Life Group said it had made “great progress” in becoming a leading provider of life insurance and pension solutions and intended to accelerate its pace of growth.

Boost earnings

Up to 2012, Swiss Life aims to boost its earnings per share by at least 12 per cent a year, with a return on equity of at least 12 per cent a year.

The company said it would distribute each year between 40 and 60 per cent of the net profit posted.

The incoming chief executive Bruno Pfister was upbeat the future of the group.

“Following the operational progress and the strategic adjustments made at the end of 2007, we are in an excellent position to accelerate the growth and further enhance profitability.”

swissinfo with agencies

In brief

Financial figures 2007

Premium volume: SFr24.2 billion (+10% compared with 2006)

Net profit: SFr1.368 billion (+43%)

Planned dividend : SF17 per share (from SFr7)

Total assets controlled by Swiss Life Group: SFr138.9 billion

Employees 8,556 (-1.6%)

Swiss Life

The Swiss Life Group is one of Europe’s leading providers of life insurance and pension solutions.

It is now the majority shareholder of the Hanover-based AWD Group, which provides financial advice for the medium- and high-income customer segments.

Swiss Life Holding, registered in Zurich, was founded in 1857 as Schweizerische Rentenanstalt.