Swiss Life, following a trend observed by German insurer Allianz, reduced its property portfolio value by 1 billion francs in 2023. Despite this adjustment, the company achieved a net profit of 1.11 billion francs for the year, largely driven by its insurance business. However, Swiss Life Asset Managers faced challenges, experiencing declines in both fee revenue and operating results. This mirrors a broader trend in the industry, where companies are reassessing their property portfolios amidst market fluctuations.
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Swiss Life reduced the fair value of its property portfolio by 1 billion francs in 2023, aligning with German insurer Allianz, which reported a 6.2% decrease in the value of its portfolio for the same period during its full-year results.
Despite this, the overall net profit for the year met expectations, reaching 1.11 billion francs, supported by the insurance business. However, Swiss Life Asset Managers experienced a decline in both its fee revenue and operating result.
Weakness in the real estate market impacted the earnings of the insurer and asset manager in 2023, with the latter business witnessing a 17% decrease in earnings compared to the previous year.
Swiss Life recorded a fee result of 664 million Swiss francs ($755 million) in 2023, approximately 100 million francs lower than both its 2022 figures and the consensus projected by Vontobel and UBS.
In France and Germany, Aellig, which is set to assume the top position, informed investors during the call that he foresees Swiss Life reducing the fair value of its property portfolio by approximately 0.5% to 1% in 2024.
The company, which has a partial ownership of the Deutsche Boerse office building near Frankfurt, stated that it anticipates achieving a fee result next year at the lower end of its target range, ranging from 850 million to 900 million francs. This projection hinges on the normalization of real estate markets in France and Germany.
The finance chief of Swiss Life expressed confidence that real estate markets in Europe will stabilize in 2024. Despite challenges in France and Germany affecting the company�s 2023 results and causing a drop in shares, he highlighted strong demand, limited supply, and stabilizing rates as positive signs indicating a recovery in the property market for the upcoming year.
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