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Swiss Life profit jumps by nearly a third

In 2002, Swiss Life made a SFr1.7 billion loss (Swiss Life)

Swiss Life, Switzerland's largest life insurer, has reported a 30 per cent rise in first-half net profit to SFr463 million ($376 million).

The company said that the result, which beat analysts' forecasts, confirmed its turnaround over the past three years, following a SFr1.7 billion loss in 2002.

A poll of analysts by the Reuters news agency had forecast an average net profit of SFr346 million, just ahead of SFr343 million for the same period last year.

Swiss Life said on Monday that the half-year result was helped by tax gains worth SFr100 million due to changes in French tax laws and the restructuring of the company's Swiss real-estate business.

"We are well on the way to improving the basic insurance result substantially on a sustainable basis," CEO Rolf Dörig said in a statement. "This will put us in a position to achieve a net result of SFr1 billion by 2008."

Dörig added full-year net profit would be above last year's result of SFr624 million, and repeated that the group aimed for a sustained return on equity of above ten per cent.

Swiss Life said operating costs were two per cent lower. Analysts have been keen to see whether Swiss Life has brought down costs sufficiently to cope with the dull life insurance markets.

Net earned insurance premiums inched down to SFr8.4 billion from SFr8.9 billion a year ago as premium income in the home market - responsible for roughly half of premiums - dropped three per cent. All other countries in which the company does business increased revenues.

Profit and loss

Business in Switzerland was still profitable for individual as well as for group contracts, Dörig said. Only new individual contracts were loss-making, he added, due to record low interest rates in the country's heavily regulated market.

Thomas Müller is replace to Bruno Pfister as the group's chief financial officer (CFO) from next year, Swiss Life said. Pfister would stay on the board and take on responsibility for the group's international business.

Müller is currently CFO of Swiss Life's banking unit Banca del Gottardo. This is the only non-life insurance activity the group has retained after a recent revamp to reverse a late 1990s spending spree.

Analysts are widely speculating it will sell the operation, despite official denials.

Swiss Life shifted its focus back to life insurance after an expansion into asset management, including the purchase of the bank in 1999. It returned to profit in 2003 after two years of losses caused by write-downs of units acquired during the stock-market boom.

swissinfo with agencies

Key facts

Swiss Life made a net profit of SFr463 million for the first half of 2005, versus SFr343 million for the same period last year.
Customers paid premiums worth SFr11.6 billion, up six per cent.
In Switzerland, premiums were down three per cent, but increased 16 per cent abroad.
Swiss Life expects net profit to reach SFr1 billion by 2008.

end of infobox

In brief

Swiss Life was founded in 1857 as the Rentenanstalt, and is Switzerland's biggest life insurer today.

The Zurich-based group operates in 40 countries and employs around 10,000 people.

In 2002, Swiss Life was on the verge of collapse after registering a loss of SFr1.7 billion.

end of infobox


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