Swiss Life Earnings: Cash Remittances Buoyed by Unit-Linked and Protection Sales

Swiss Life SLHN has reported a net profit of CHF 630 million for the first half of 2023. That is versus our CHF 1.0 billion full-year forecast and the CHF 1.3 billion consensus forecast. With the business holding around CHF 8.5 billion in shareholders’ equity, it looks like Swiss Life may earn a return on equity above 12% for the full year, well above the 10% cost of capital that we apply. We maintain our CHF 630 per-share fair value estimate and no moat rating.

In its home market of Switzerland, Swiss Life grew gross written premiums by a steady 2% to CHF 6.04 billion as it continued to focus on semiautonomous solutions where sales of insurance products are also part of the pension plans the company sells. Assets under management in semiautonomous solutions are now at CHF 6.9 billion as of June 30. The earnings generated from its own independent financial advisors network in its home market fell by 4%. In Swiss Life’s second core market of France, where Swiss Life sells a lot more unit-linked products than its peers, while Swiss Life backed away from selling life insurance it has sold a lot more health and protection insurance than the market in the first half. These higher sales of unit-linked and better sales of health and protection have resulted in a nice fee and commission income increase, rising by close to 10%. In Germany, Swiss Life has sold more disability, hybrid, and unit-linked products. Swiss Life’s own German IFA network is strong. The company has continued to build out this network and increased the productivity of advisors.