Swiss Life Holding AG, the biggest life insurer in Switzerland, raised its dividend by 22 percent after posting second-half profit that exceeded analysts’ estimates. The shares rose the most in more than three months.
Net income was 309 million Swiss francs ($348 million) compared with a loss of 266 million francs in the second half of 2012, when Swiss Life wrote down the value of a German brokerage, according to Bloomberg calculations that were confirmed by the Zurich-based company. The average estimate of six analysts was for a 238 million-franc profit. Swiss life raised its dividend to 5.50 francs a share.
“2013 was a very good year,” Chief Executive Officer Bruno Pfister said in an e-mailed statement. Swiss Life saw “higher premium income, higher margins and higher profit accompanied by lower costs.”
The company is seeking to increase profit by cutting costs and boosting sales in its home market and France. Chief Investment Officer Patrick Frost, 45, will become CEO in July, as the company grows its asset management unit, which posted net new inflows of 5.6 billion francs in its external customer business last year.
Premium income increased 5.4 percent to 18 billion francs as Swiss Life sold more policies in Switzerland and France. Profit from operations more than tripled to 1.15 billion francs last year, the highest since 2006.
The shares jumped as much as 6.4 percent to 215.50 francs in Zurich trading, the biggest increase since Nov. 12 and extending gains over the past 12 months to 54 percent. That compares to a 31 percent rise for the 33-member Bloomberg Europe 500 Insurance Index.
Profit was higher than expected and solid growth and new business performance “reflect the life insurer’s progress,” Stefan Schuermann, a Zurich-based analyst with Vontobel who has a buy rating on the stock, said in e-mailed comments to clients.
Earnings from asset management were boosted by a number of mandates from institutional investors including pension funds, Swiss Life said.
The company said it had not been in contact with U.S. authorities over a reported probe into aiding tax evasion with so called wrapper products, adding it had stopped selling to U.S. clients in 2012. The company considers its business “tax compliant,” according to Pfister.