Swiss Life Boosts Profit on Premium Growth, Efficiency Measures

Premium growth and cost-saving measures translated into a 94% rise in first-half net income for Swiss Life Group, which reported rising revenue in all of its major regional markets.

First-half net income rose to 269 million Swiss francs (200.4 million euros) from 139 million francs for the same period a year earlier. Gross premiums, policy fees and deposits rose 20% to 12.24 billion francs, in local currency terms.

"Swiss Life performed strongly in the first half of 2010," said Chief Executive Bruno Pfister in a statement. "The improvements we achieved in client relations and distribution confirm that we have made sustainable progress in our pursuit of profitable growth. The measures introduced last year as part of our group-wide Milestone program have started to pay off."

Milestone is an "efficency-enhancing program" implemented by Swiss Life last year. Swiss Life said it already achieved its 2012 target of increasing its "modern insurance and risk products" to more than 70% of its new business. The group also said it reduced costs by 8% in the first half from last year's 767 million francs.

Premium volume was stable in Switzerland, while growth in the international business, particularly for high net worth individuals, as strong in Germany (up 14%) and France (up 18%).

But the group said it "is not yet on target" in margin management, as a low interest-rate environment and competitive pressure kept first-half new business margin at 0.9%, unchanged from the end of 2009.

Swiss Life claimed to have "offset some of the negative impacts" of low interest rates with specific measures. "Our priority is to achieve our margin targets for 2012, which is why we have launched around 30 products over the last 12 months, some of which are new and some of which are relaunches," said Chief Financial Officer Thomas Buess in a statement. "We will continue to adopt the approach -- profitability before growth."

AWD, Swiss Life's Germany-based financial services unit serving medium to high-income clients, achieved a turnaround in the first half, posting a segment result of 15 million francs, compared with a 28 million franc loss last year.