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Annual Report 2022
Annual Report 2022
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17 Intangible Assets including Intangible Insurance Assets

In CHF million
    31.12.2022   31.12.2021
Intangible insurance assets   2 050   1 637
Other intangible assets   1 714   1 758
Total intangible assets   3 764   3 395

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
    2022   2021   2022   2021   2022   2021   2022   2021
Balance as at 1 January   3   6   1 499   1 363   135   89   1 637   1 459
Additions   –   –   346   411   88   72   434   483
Amortisation   0   –3   –122   –342   –36   –26   –159   –371
Impairment   –2   –   –   –   –   –   –2   –
Effect of shadow accounting   0   0   195   110   –   –   195   110
Foreign currency translation differences   0   0   –56   –44   0   0   –56   –44
Balance as at end of period   1   3   1 861   1 499   187   135   2 050   1 637

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 2022

In CHF million
    Notes   Goodwill   Customer relationships   Computer software   Brands and other   Total
                         
Cost
Balance as at 1 January       1 575   123   35   25   1 758
Additions       –   0   21   2   23
Additions from internal development       –   –   0   –   0
Additions from business combinations   28    52   17   0   0   71
Disposals   28    –3   0   –3   –16   –22
Amortisation       –   –36   –11   –1   –49
Foreign currency translation differences       –56   –8   –1   0   –66
Balance as at end of period       1 568   96   40   10   1 714
                         
Cost       2 020   300   231   30   2 581
Accumulated amortisation and impairment       –452   –204   –191   –21   –867
Total other intangible assets as at end of period       1 568   96   40   10   1 714

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       –   –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

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 July 2022, Swiss Life acquired elipsLife, an insurance company for institutional clients headquartered in Liechtenstein. The acquisition resulted in goodwill of CHF 51 million in the segment “International”.

In November 2021, 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, 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 2021 and CHF 47 million in the first half of 2022.

Following an adjustment of the consideration, goodwill in relation to the Nestor Financial Group Limited acquisition, which had been closed in October 2020, increased by CHF 4 million in March 2021.

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 use a single set of estimated cash flows and a single discount rate.

Goodwill

In CHF million
    Switzerland   France   Germany   International   Asset Managers
    31.12.2022   31.12.2021   31.12.2022   31.12.2021   31.12.2022   31.12.2021   31.12.2022   31.12.2021   31.12.2022   31.12.2021
Net carrying amount of goodwill   152   152   294   298   399   419   379   340   344   366
Impairment   –   –   –   –   –   –   –   –   –   –
                                         
Key assumptions used for impairment tests
Eternal growth rate   1.0%   1.0%   1.6%   1.5%   2.0%   2.0%   2.0%   2.0%   2.0%   2.0%
Discount rate   8.3%   7.5%   10.8%   8.6%   10.4%   8.4%   9.9%   8.0%   8.6%   8.0%

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 2022, the “France” segment comprises customer relationships of CHF 2 million (31.12.2021: CHF 4 million) and the “Asset Managers” segment comprises customer relationships of CHF 58 million (31.12.2021: CHF 77 million), of which CHF 34 million were acquired with Ness, Risan & Partners in November 2021. The “International” segment comprises customer relationships of CHF 36 million (31.12.2021: CHF 41 million). The amount includes CHF 17 million of customer relationships acquired with elipsLife in July 2022, which was fully amortised in the second half of 2022, and CHF 36 million of customer relationships added with the acquisition of Principal & Prosper IFA Holdings Ltd. in June 2021. Customer relationships are amortised over their useful lives.

Brands and other

As at 31 December 2022, “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, which was fully earned in the second half of 2022. Brands are amortised over their useful lives. Following a reorganisation, the Corpus Sireo brand was fully impaired, resulting in an impairment loss of CHF 7 million in the first half of 2021.