Swiss Life (AO) | Hold | 3M trading update: reassuring fee momentum

Research evidence excerpt

Swiss Life (AO) | Hold | 3M trading update: reassuring fee momentum

e non-recurring contribution, as we assumed a share closer to the company’s long term guidance of around

25%, although this metric remains highly volatile between quarters. Assets under management increased to CHF148bn.

Gross written premiums, policy fees and deposits received increased 5% in local currency to CHF8.2bn, slightly ahead of

expectations. Switzerland remained the key growth driver with premiums up 10%, while France declined 2% and International

declined 3%.

French life premiums declined 1%, 7% miss on consensus, although the unit-linked share remained high at 73% versus 65% in the

prior year, reflecting the continued focus on capital light unit-linked business.

The SST ratio remained strong at around 210%, comfortably above the strategic target range of 140-190% and broadly in line with

expectations.

Direct investment income was a negative surprise for us, declining 13% YOY, mainly due to lower infrastructure and equity income

as well as FX movements.

Swiss Life Germany announced the acquisition of TELIS Group, adding around 1800 certified advisors and increasing the advisory

network to around 8000 advisors. The transaction is fully in line with Swiss Life’s fee-driven strategy and its Swiss Life 2027

ambition of around 7200 advisors. No financial details were disclosed, although we estimate TELIS could contribute around

EUR200m of annual fee income versus Swiss Life Germany’s current fee income base of around EUR830m. This represents around

18% of Swiss Life Germany’s current fee income base and around 6% of total group fee income.

Valuation

Swiss Life trades on a 2027E adjusted P/E of 17.3x, representing a 4% discount to its 12-month average, and offers a 4.8% dividend

yield.

IMPORTANT.