The Swiss Life Group is losing momentum. Current Revenue growth is analogous to the half-year. But one point must be of far more concern.
The Swiss Life Group has slowed its growth spurt in the current financial year. Revenues fell 1 percent from January to September to around 15 billion Swiss francs. In local currencies, mainly euros with the key markets of Germany and France, it was up 2 percent, the group said on Wednesday.
In the first half of 2022 the increase in premium income in local currencies had also been 2 percent. So things are not going up any more dynamically.
Foreign countries with skid marks
The largest foreign market, France, is also experiencing difficulties. Gross premiums and policy fees fell by 8 percent to 5.2 billion Swiss francs. Even in local currency, the decline was 1 percent.
The company, which is actually active in life insurance, is also becoming more and more like a bank and is increasingly collecting fees for the management of pension assets.
Fee income increased by 13 percent to 1.7 billion Swiss francs in the first three quarters of the current year. In the first half of the year, however, the growth rate was also 13 percent.
Capital as a problem?
Swiss Life expects its solvency ratio according to the Swiss Solvency Test (SST) to be “slightly above 200 percent” as of September 30, 2022. This meant that the solvency ratio was above the strategic ambition of 140 to 190 percent. However, since the beginning of the year at 223 percent and at the middle of the year at 215 percent, that value has always gone down a little.
The Group’s equity situation is likely to be problematic. In the first half of the year equity fell by 36 percent to around 10 billion Swiss francs, due to the capital market situation with a drop in values and the rise in interest rates, as also reported by muula.ch.
The many bonds held in a life insurer’s investment portfolio lose a lot of value when interest rates rise.
However, the insurance company does not provide any information on this position for the third quarter. Even when specifically asked by muula.ch, the Swiss Life Group did not want to comment on the status of its equity.
A media spokesperson explained that the insurance group does not publish complete figures for the first and third quarters.