Swiss Life posts 43 percent jump in full-year profit despite some writedowns
Insurer company said profit rose a record 43 percent in spite of minor losses incurred from the U.S. mortgage crises27 March 2008
ZURICH - Insurer Swiss Life Holding said Thursday that full-year profit rose a record 43 percent although it incurred some minor losses because of the U.S. subprime mortgage crises.
The company posted a net profit of CHF 1.37 billion for 2007 compared with 933 million francs in 2006. The overall premiums were raised by 10 percent to CHF 24.2 billion, it said.
The result, boosted by strong growth in France and Germany, beat analysts expectations of CHF 1.2 billion.
Swiss Life said profit was reduced by a CHF 72 million loss linked to writedowns of its direct and indirect investments in subprime U.S. mortgages last year.
It said the reduction in profit for the 2007 financial statements resulted from its decision "to completely write off positions vulnerable to a further aggravation of the liquidity situation brought on by the market turbulence."
"Direct and indirect investments in subprime U.S. mortgages totalled CHF 83 million overall as at 31 December 2007, considerably less than 0.1% of overall investments.
The company said it was not affected by the mortgage crisis in any other way. Chief Executive Rolf Doering said Swiss Life has already achieved its targets originally set for 2008.
"Thanks to our operational advances and having set the strategic course, we are well positioned for the next growth surge," he said in a statement.
The company said it will raise its dividend to CHF 17 per share, up from CHF 7 a year ago.
Shares in Swiss Life were up 4 percent at CHF 260.25 in Zurich.
Under a restructuring program that it began last year, Swiss Life sold its insurance operations in the Netherlands and Belgium and divested its private banking unit Banca del Gottardo. This allowed Swiss Life to acquire a majority stake in German financial services provider AWD in December. It also has been expanding to Asia and emerging markets such as Turkey.
Swiss Life said it aims to boost its earnings per share by at least 12 percent a year up to 2012.
[Copyright AP 2008]