- Fee Result: Increased by 17% to CHF395 million.
- Cash Remittance: Grew by 19% to well over CHF1.2 billion.
- Return on Equity: Annualized at 17.8%, above the target range of 10% to 12%.
- Net Profit: Stable at CHF632 million; adjusted net profit increased by 7% year on year.
- SST Ratio: Around 205%, well above the ambition range.
- Insurance Revenue: Increased by 1% to CHF4.5 billion.
- Insurance Service Expenses: Increased to CHF3.8 billion.
- Net Investment Result: Amounted to CHF491 million.
- Profit from Operations: Increased to CHF883 million.
- Income Tax Expense: Increased to CHF184 million.
- Gross Written Premiums, Fees, and Deposits: Increased by 3% in local currency to CHF11.7 billion.
- Fee and Commission Income: Up by 7% in local currency to CHF1.3 billion.
- Net Investment Income: Increased to CHF1.9 billion.
- Operating Expenses: Increased to CHF1 billion.
- Premiums in Switzerland: Increased by 1% to CHF6.1 billion.
- Assets Under Management (Switzerland): Increased to CHF7.6 billion.
- Segment Result (Switzerland): Decreased by 2% to CHF439 million.
- Cash Remittance (Switzerland): Up by 31% to CHF699 million.
- Premiums in France: Increased by 11% to CHF3.8 billion.
- Fee and Commission Income (France): Rose by 29% to CHF295 million.
- Segment Result (France): Grew by 18% to CHF192 million.
- Cash Remittance (France): Increased by 15% to CHF178 million.
- Premiums in Germany: Up by 3% to CHF739 million.
- Fee and Commission Income (Germany): Grew by 5% to CHF400 million.
- Segment Result (Germany): Down by 2% to CHF113 million.
- Cash Remittance (Germany): Increased by 7% to CHF101 million.
- Premiums (International): Decreased by 6% to CHF1.3 billion.
- Fee and Commission Income (International): Down by 3% to CHF192 million.
- Segment Result (International): Up by 15% to CHF63 million.
- Cash Remittance (International): Up by 3% to CHF56 million.
- Asset Managers Total Income: Up by 15% to CHF506 million.
- Segment Result (Asset Managers): Increased by 30% to CHF154 million.
- Cash Remittance (Asset Managers): Increased by 9% to CHF239 million.
- Assets Under Management (TPAM): CHF117 billion compared to CHF112 billion at year-end 2023.
- Net New Assets (TPAM): CHF1.2 billion compared to CHF6.9 billion in the prior year period.
- Operating Expenses (Group): Increased by 8% in local currency to CHF1 billion.
- Direct Investment Income: Increased to CHF2.1 billion.
- Net Investment Income: Up to CHF1.9 billion.
- Insurance Reserves: Stable at CHF180 billion in local currency.
- Pretax CSM: CHF15.3 billion at the end of June 2024.
- Shareholders' Equity: Decreased by 7% to CHF7 billion.
- Total Outstanding Financing Instruments: CHF5.6 billion.
- Liquidity at Holding: CHF1 billion at the end of June 2024.
Release Date: September 03, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Fee result increased by 17% to CHF395 million, driven by higher contributions from asset managers and France.
- Cash remittance grew by 19% to well over CHF1.2 billion.
- Annualized return on equity was at 17.8%, well above the target range of 10% to 12%.
- Net profit for the half year was stable at CHF632 million, with an adjusted increase of 7% year on year.
- Half year SST ratio of around 205% remained well above the ambition range.
Negative Points
- Insurance service expenses increased in line with insurance revenue to CHF3.8 billion.
- Adjusted profit from operations decreased by 7% year on year, considering negative FX translation effects.
- Value of new business decreased by 5% to CHF190 million, mainly due to business mix and pricing effects as well as lower interest rates.
- Fee and commission income in the International segment was down by 3% to CHF192 million.
- Shareholders' equity decreased by 7% to CHF7 billion compared to year-end 2023, largely driven by dividend payment and share buyback.
Q & A Highlights
Q: Can you provide details on the reserve releases in individual life and the outlook given the current interest rate level?
A: For the first half of 2024, reserve releases were about CHF0.15 billion, consistent with 2023's full-year figure of CHF0.3 billion. Approximately one-third of these releases pertain to individual life. This run rate is expected to continue in the current interest rate environment. (Matthias Aellig, CEO)
Q: What are the cash implications of transferring real estate assets from policyholders to TPAM, and is this a one-off transaction?
A: While we do not disclose specific cash impacts, the transaction had a positive contribution due to significant unrealized capital gains. This type of transaction is not unique and has been done in the past, indicating potential for future similar transactions. (Matthias Aellig, CEO)
Q: Can you split out the economic variances in the CSM walk and their impact?
A: The negative CHF0.3 billion in economic variances is mainly driven by interest rate differentials, particularly between the Swiss franc and the U.S. dollar. This was partially offset by positive equity market performance and FX translation effects. (Marco Gerussi, CFO)
Q: What is the sustainability of the strong French non-life results, and how should we model this going forward?
A: While the first half results are strong, it is too early to confirm sustainability. We maintain our full-year guidance and continue to work on improving the health and protection business. (Matthias Aellig, CEO)
Q: Can you clarify the investments in TPAM that led to a 90% cost-income ratio, and will these investments continue?
A: The investments are primarily in a new index-based investment offering by our asset managers. These investments are expected to continue over the next few quarters as the new business area develops. (Marco Gerussi, CFO)
Q: How did the real estate market dynamics in Germany and France evolve in Q2 2024, and what are your expectations?
A: The German market is in relatively better shape than France, with growing transaction activity. Our expectation for 30% nonrecurring income for the full year 2024 remains, supported by our pipeline and market developments. (Matthias Aellig, CEO)
Q: How are you thinking about the excess cash at the holding level, given you are at the upper end of your target range?
A: We continue to carefully assess the situation on an ongoing basis, with no changes to our approach. There is no automatism in our framework for cash and SST. (Matthias Aellig, CEO)
Q: Can you provide guidance on future cash remittances, considering the one-off effects in the current numbers?
A: The one-off effects amount to CHF0.1 billion to CHF0.2 billion. The CHF1.3 billion cash remittance, excluding these one-offs, provides a good base for future cash remittances. We also consider the cumulative cash remittance of CHF3.4 billion over the past 2.5 years. (Matthias Aellig, CEO)
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
