17 Intangible Assets including Intangible Insurance Assets
| In CHF million | ||||
|---|---|---|---|---|
| 31.12.2021 | 31.12.2020 | |||
| Intangible insurance assets | 1 637 | 1 459 | ||
| Other intangible assets | 1 758 | 1 600 | ||
| Total intangible assets | 3 395 | 3 058 | ||
Intangible insurance assets
| In CHF million | ||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Present value of future profits from acquired insurance portfolios (PVP) | Deferred acquisition costs (DAC) | Deferred origination costs (DOC) | Total | |||||||||||||
| 2021 | 2020 | 2021 | 2020 | 2021 | 2020 | 2021 | 2020 | |||||||||
| Balance as at 1 January | 6 | 7 | 1 363 | 1 360 | 89 | 54 | 1 459 | 1 421 | ||||||||
| Additions | – | – | 411 | 379 | 72 | 54 | 483 | 432 | ||||||||
| Amortisation | –3 | –1 | –342 | –335 | –26 | –17 | –371 | –353 | ||||||||
| Effect of shadow accounting | 0 | 0 | 110 | –37 | – | – | 110 | –37 | ||||||||
| Foreign currency translation differences | 0 | 0 | –44 | –3 | 0 | –1 | –44 | –4 | ||||||||
| Balance as at end of period | 3 | 6 | 1 499 | 1 363 | 135 | 89 | 1 637 | 1 459 | ||||||||
Present value of future profits (PVP)
The present value of future profits relates to portfolios of insurance contracts and investment contracts with discretionary participation acquired in a business combination or transfer of portfolios. It relates to contracts acquired in Germany and is amortised in proportion to gross profits or margins over the effective life of the acquired insurance and investment contracts.
Deferred acquisition costs (DAC)
Certain acquisition costs relating to new and renewed insurance contracts and investment contracts with discretionary participation are deferred.
Deferred origination costs (DOC)
These costs are recoverable and are directly attributable to securing the right to investment management services within investment contract policies. They relate to contracts in Switzerland, Luxembourg and Singapore.
Other intangible assets for the year 2021
| In CHF million | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Notes | Goodwill | Customer relationships | Computer software | Brands and other | Total | |||||||
| Cost | ||||||||||||
| Balance as at 1 January | 1 452 | 76 | 40 | 32 | 1 600 | |||||||
| Additions | – | – | 16 | 1 | 17 | |||||||
| Additions from business combinations | 28 | 149 | 70 | – | – | 220 | ||||||
| Disposals | – | – | –6 | 0 | –6 | |||||||
| Amortisation | – | –13 | –14 | –1 | –28 | |||||||
| Impairment losses | – | –8 | – | –7 | –15 | |||||||
| Foreign currency translation differences | –26 | –3 | –1 | 0 | –31 | |||||||
| Balance as at end of period | 1 575 | 123 | 35 | 25 | 1 758 | |||||||
| Cost | 2 043 | 298 | 222 | 45 | 2 608 | |||||||
| Accumulated amortisation and impairment | –468 | –174 | –187 | –21 | –850 | |||||||
| Total other intangible assets as at end of period | 1 575 | 123 | 35 | 25 | 1 758 | |||||||
Other intangible assets for the year 2020
| In CHF million | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Goodwill | Customer relationships | Computer software | Brands and other | Total | ||||||||
| Cost | ||||||||||||
| Balance as at 1 January | 1 461 | 105 | 41 | 46 | 1 653 | |||||||
| Additions | – | – | 14 | 1 | 15 | |||||||
| Additions from business combinations | 7 | – | – | – | 7 | |||||||
| Disposals | –7 | –1 | –1 | –5 | –14 | |||||||
| Amortisation | – | –15 | –14 | –1 | –30 | |||||||
| Impairment losses | – | –12 | 0 | –9 | –21 | |||||||
| Foreign currency translation differences | –8 | –1 | 0 | 0 | –10 | |||||||
| Balance as at end of period | 1 452 | 76 | 40 | 32 | 1 600 | |||||||
| Cost | 1 935 | 234 | 224 | 45 | 2 438 | |||||||
| Accumulated amortisation and impairment | –483 | –159 | –184 | –13 | –838 | |||||||
| Total other intangible assets as at end of period | 1 452 | 76 | 40 | 32 | 1 600 | |||||||
Goodwill
Goodwill represents the excess of the fair value of the consideration transferred and the amount of any non-controlling interest recognised, if applicable, over the fair value of the assets and liabilities recognised at the date of acquisition. Goodwill includes amounts relating to both the Swiss Life Group’s interest and the non-controlling interest in the business acquired in the case where non-controlling interest is measured at fair value. Goodwill on acquisition of subsidiaries is included in intangible assets. Goodwill on associates is included in the carrying amount of the investment.
In November 2021, a goodwill of CHF 99 million was recognised in the segment “Asset Managers” resulting from the acquisition of the real estate business of Ness, Risan & Partners (NRP) in Oslo.
In June 2021, a goodwill of CHF 64 million was recognised in the segment “International” in relation to the acquisition of the Edinburgh based Principal & Prosper IFA Holdings Ltd. The amount of CHF 64 million, that was the result of a preliminary purchase price allocation, was adjusted to CHF 46 million in the second half of the year.
In October 2020, a goodwill of CHF 7 million was recognised in the segment “International” in relation to the acquisition of the London based Nestor Financial Group Limited. Following an adjustment of the consideration, goodwill in relation to the Nestor Financial Group Limited acquisition increased by CHF 4 million in March 2021.
The divestment of Financière du Capitole in France resulted in a derecognition of goodwill of CHF 7 million in December 2020.
Since 1 January 2021, the goodwill recorded in previous years has been assigned to one cash generating unit at the level of the respective segment, which is the lowest level at which goodwill is monitored. This reallocation was necessary in order to be able to carry out the impairment tests at the level at which the goodwill is actually monitored by management today. During the reallocation, the requirements of IAS 36 were complied with, according to which the new CGUs correspond to the lowest level at which an impairment test can be carried out. In addition, neither the book values nor the relevant events and circumstances have changed significantly since the last impairment test. The following table shows the reallocation of the existing goodwill to the new CGUs.
Reallocation of goodwills
| in CHF million | ||||||
|---|---|---|---|---|---|---|
| 31.12.2020 | Reallocation | 01.01.2021 | ||||
| Switzerland | ||||||
| Swiss Life Select Switzerland | 152 | –152 | – | |||
| Segment Switzerland | – | 152 | 152 | |||
| France | ||||||
| Lloyd Continental | 287 | –287 | – | |||
| Other (France) | 10 | –10 | – | |||
| Segment France | – | 297 | 297 | |||
| Germany | ||||||
| Swiss Life Select Germany | 437 | –437 | – | |||
| Segment Germany | – | 437 | 437 | |||
| International | ||||||
| Swiss Life Select International | 70 | –70 | – | |||
| CapitalLeben | 149 | –149 | – | |||
| Other (International) | 71 | –71 | – | |||
| Segment International | – | 290 | 290 | |||
| Asset Managers | ||||||
| Corpus Sireo | 94 | –94 | – | |||
| Beos | 131 | –131 | – | |||
| Other (Asset Managers) | 50 | –50 | – | |||
| Segment Asset Managers | – | 275 | 275 | |||
| TOTAL | 1 452 | – | 1 452 | |||
The calculations relating to the recoverable amounts, which have been determined on a value-in-use basis, use cash flow projections based on financial budgets approved by management. The projection covers a three-year period. The calculations are based on present values that traditionally use a single set of estimated cash flows and a single discount rate.
Goodwill
| In CHF million | ||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Switzerland | France | Germany | International | Asset Managers | ||||||||||||||||
| 31.12.2021 | 01.01.2021 | 31.12.2021 | 01.01.2021 | 31.12.2021 | 01.01.2021 | 31.12.2021 | 01.01.2021 | 31.12.2021 | 01.01.2021 | |||||||||||
| Net carrying amount of goodwill | 152 | 152 | 298 | 297 | 419 | 437 | 340 | 290 | 366 | 275 | ||||||||||
| Impairment losses | – | – | – | – | – | – | – | – | – | – | ||||||||||
| Key assumptions used for impairment tests | ||||||||||||||||||||
| Growth rate | 1.0% | 1.0% | 1.5% | 1.5% | 2.0% | 2.0% | 2.0% | 2.0% | 2.0% | 2.0% | ||||||||||
| Discount rate | 7.5% | 7.3% | 8.6% | 8.6% | 8.4% | 8.2% | 8.0% | 7.6% | 8.0% | 7.8% | ||||||||||
The discount rates used for the value-in-use calculations are based on weighted average cost of capital (WACC) derived from the Capital Asset Pricing Model. Peer group comparisons and the beta of the Swiss Life Group are used for determining the beta used in the calculation. Capital structure reflected in the WACC calculation is in line with the target capital structure of the Swiss Life Group.
The growth rates reflect the long-term inflation expectations of the International Monetary Fund.
Customer relationships
As at 31 December 2021, customer relationships comprise customer relationships relating to Swiss Life Select: CHF 1 million (31.12.2020: CHF 1 million), which were allocated to the “Switzerland” segment. The “France” segment comprises customer relationships of CHF 4 million (31.12.2020: CHF 5 million) and the “Asset Managers” segment comprises customer relationships of CHF 77 million (31.12.2020: CHF 63 million), of which CHF 34 million were acquired with Ness, Risan & Partners in November 2021. An impairment loss of CHF 12 million was recognised related to customer relationships in the “Asset Managers” segment in the first half of 2020. The “International” segment comprises customer relationships of CHF 41 million (31.12.2020: CHF 7 million). The amount includes CHF 36 million of customer relationships added with the acquisition of Principal & Prosper IFA Holdings Ltd. in June 2021, CHF 15 million of which had already been recorded in the first half of the year in connection with the preliminary purchase price allocation. Customer relationships are amortised over their useful lives.
Brands and other
As at 31 December 2021, “Brands and other” comprises the brands Mayfair, Beos and Fincentrum, as well as an intangible asset representing a performance fee related to the acquisition of Fontavis. Brands are amortised over their useful lives. Following a two-stage reorganisation, the Corpus Sireo brand was fully impaired between 1 July 2020 and 30 June 2021, resulting in an impairment loss of CHF 9 million in the second half of 2020 and CHF 7 million in the first half of 2021.