Morningstar | SLHN Updated Forecasts and Estimates from 12 Nov 2018
Swiss Life reported key indicators for 2018 first nine months. This includes fee income of CHF 1.2 billion, and that is 7% growth in local currency on the previous year. Premiums came in at CHF 14.7 billion, and that is a 4% increase in local currency on the prior year. That has mainly been driven by individual life in France and Group life in Switzerland. This press release of nine-month indicators gives us very little insight into the movements and results of the business for this period. We are therefore leaving our CHF 385 fair value estimate unchanged and maintaining our no-moat and stable moat trend ratings.The rise in fee income has been driven by strong growth in owned IFAs (+10%) and individual unit-linked business in France. The asset management division acquired new assets of CHF 5.2 billion in its third-party, TPAM, business. And this has pushed these assets to CHF 66.3 billion. This is a decent rise on the CHF 61.4 billion in the comparable period. Direct investment income of CHF 3.3 billion versus CHF 3.2 billion in the prior year. This equates to a direct investment yield of 2.2%. This is probably the only interesting part of this release. That is because in first-half 2018 the business reported a net investment yield of 1.7% with CHF 2.24 billion of direct investment income. We think this rising yield is the driving force behind the business at the moment. And this comes from higher allocation to equities and bringing in more dividends.
We view Swiss Life shares as fairly valued.
Swiss Life is a holding company, engaged in providing life insurance and pension solutions and services. Co.'s segments include: Switzerland, France, Germany, International, Asset Managers, and Other. Co.'s Switzerland, France, Germany and International segments primarily consist of life insurance operations and distribution units. The life insurance operations provides a range of life, pension, health, annuity and investment-type policies to both groups and individuals, including disability coverage. Co. focuses primarily on life and pensions in Switzerland, France and Germany and on cross-border business from Liechtenstein, Luxembourg and Singapore.
Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. The company offer an extensive line of products and services for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors.
Morningstar provides data on approximately 530,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 18 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries and had approximately $185 billion in assets under advisement and management as of June 30, 2016.
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