Swiss Life said it had achieved its fee result target a year earlier than planned and was ahead of schedule with two of its other 2018 goals as it reported better-than-expected 2017 net profit on Tuesday. Switzerland's biggest life insurer said net profit after minorities rose to 1.007 billion Swiss francs ($1.07 billion) from 922 million francs a year earlier, beating the average estimate of 983 million francs in a Reuters poll.
The Zurich-based company proposed raising its dividend to 13.50 francs from 11 francs. The company's profit was boosted by the fees it charges for providing insurance services and managing assets and wealth, which increased by 11 percent to 442 million francs.
The fees, part of its strategy to diversify its business, cushioned the effect of the low interest rate environment which has dampened returns from traditional investments. They meant Swiss Re reached its 2018 target to make a profit of 400-450 million francs from fees ahead of time. Two other targets - bringing in new business and cash remittances - were also ahead of schedule, the company said.
Its shares were 1.7 percent higher in premarket trading. The stock has gained 8.6 percent in the past 12 months, lagging a 9.5 percent rise of the Stoxx Europe 600 Insurance Index . "The fee business accounted for a fundamental proportion of our good results," Chief Executive Patrick Frost said.
"That plus the pleasing increase in the value of new business emphasise that we are advancing very well with the development of our business model: we are either on or ahead of schedule to achieve all our targets under 'Swiss Life 2018'. Frost said an investigation by US authorities into whether the company helped American clients dodge tax was at "very early stage".
"In terms of any possible financial charges, it is way too early to tell whether this will lead to any charges or not," he told reporters. In September Swiss Life said it was contacted by the US Department of Justice about its insurance wrapper business. Swiss Life ,whose main markets include Switzerland, France and Germany, has focused on trimming costs and raising third-party asset management and investment income to offset sluggishness in its core life insurance business.
Comments
Comments are closed.