Annual Report 2023

7 Details of Certain Items in the Consolidated Statement of Income

Insurance revenue

In CHF million
	2023	2022

CSM recognised for services provided
from contracts to which the VFA has been applied	1 231	1 155
from contracts to which the BBA has been applied	53	49
Total CSM recognised for services provided	1 283	1 204

Change in risk adjustment for non-financial risk for risk expired
from contracts to which the VFA has been applied	18	14
from contracts to which the BBA has been applied	2	3
Total change in risk adjustment for non-financial risk for risk expired	20	17

Expected incurred claims and other insurance service expenses
from contracts to which the VFA has been applied	3 228	3 207
from contracts to which the BBA has been applied	615	590
Total expected incurred claims and other insurance service expenses	3 843	3 797

Recovery of insurance acquisition cash flows
from contracts to which the VFA has been applied	283	269
from contracts to which the BBA has been applied	37	43
Total recovery of insurance acquisition cash flows	320	312

Experience adjustments on premiums and related cash flows
from contracts to which the VFA has been applied	–	–
from contracts to which the BBA has been applied	71	54
Total experience adjustments on premiums and related cash flows	71	54

Insurance revenue from contracts to which the PAA has been applied	3 258	2 633

Total insurance revenue	8 797	8 017

Expenses

In CHF million
	Notes	2023	2022

Expenses from incurred claims and onerous contracts
Incurred claims		5 490	4 956
Losses and reversal of losses on onerous contracts		–2	–23
Adjustments to liabilites for incurred claims		179	38
Total expenses from incurred claims and onerous contracts		5 667	4 972

Commission expense
Insurance agent and broker commissions		935	889
Asset management and banking commissions		132	143
Other commissions and fees		116	116
Total commission expense		1 183	1 148

Employee benefits expense
Wages and salaries		846	831
Social security		175	173
Defined benefit plans	19	70	88
Defined contribution plans		5	6
Other employee benefits		139	129
Total employee benefits expense		1 234	1 227

Depreciation and amortisation expense
Depreciation of property and equipment¹		53	53
Amortisation of intangible assets	13	30	49
Amortisation of investment contract costs		0	0
Total depreciation and amortisation expense		83	102

Impairment of property and equipment and intangible assets
Impairment of property and equipment		0	0
Impairment of intangible assets		2	–
Total impairment of property and equipment and intangible assets		2	0

Miscellaneous expenses
Marketing and advertising		60	67
Information technology and systems		149	139
Maintenance and repair		28	32
Short-term leases		4	6
Leases of low-value assets		2	1
Professional services		245	245
Cost of inventory property sold		170	93
Premium taxes and other non-income taxes		69	69
Other		100	165
Total miscellaneous expenses		825	816

Total expenses before amortisation of insurance acquisition cash flows		8 995	8 267

Amortisation of insurance acquisition cash flows		622	572
Total expenses		9 617	8 839
Thereof:
Insurance service expenses		7 445	6 588
Other expenses		2 172	2 251
¹ Including depreciation of right-of-use assets arising from leases of CHF 38 million (2022: CHF 37 million)

Other items in the income statement

In CHF million
	2023	2022

Commission income
Brokerage commissions	873	879
Asset management commissions	656	706
Other commissions and fees	401	353
Total commission income	1 929	1 938

Other income
Realised gains/losses on sales of subsidiaries, associates and other assets	53	53
Revenue from sale of inventory property	203	99
Other foreign currency gains/losses	345	106
Other	44	16
Total other income	646	275

Other interest expense
Interest expense on deposits	59	19
Negative interest on repurchase agreements	3	–16
Interest expense on amounts due to banks	211	61
Interest expense on lease liabilities	5	4
Other interest expense	6	19
Total other interest expense	284	87

Investment result

In CHF million
	Notes	2023	2022

Investment income
Interest income on financial assets available for sale		–	2 056
Interest income on loans and receivables		–	276
Dividend income on financial assets available for sale		–	450
Interest income on financial assets at fair value through other comprehensive income		2 310	–
Interest income on financial assets at amortised cost		286	–
Dividend income on financial assets at fair value through other comprehensive income	9	47	–
Net income on investment property		1 106	1 085
Net income on own-use property (underlying item in VFA)		0	–
Other interest income		101	24
Total investment income		3 849	3 891

Net gains/losses including impairment losses on financial assets
Financial assets available for sale		–	–57
Loans and receivables		–	12
Financial assets at fair value through other comprehensive income		–167	–
Financial assets at amortised cost		–3	–
Hedging gains/losses reclassified from other comprehensive income		97	228
Foreign currency gains/losses		–2 133	–546
Net impairment losses on financial assets	5	40	–544
Total net gains/losses including impairment losses on financial assets		–2 165	–906

Net gains/losses on financial instruments at fair value through profit or loss
Currency derivatives		1 098	–65
Interest rate derivatives		311	367
Equity derivatives		–404	468
Other derivatives		–28	4
Financial assets designated as at fair value through profit or loss^1,2		311	–4 519
Financial assets mandatorily measured at fair value through profit or loss¹		4 597	–
Investments in associates³		0	33
Investment contracts without discretionary participation	15	–1 845	1 813
Third-party interests in consolidated investment funds		–22	–48
Other financial liabilities		1	–
Total net gains/losses on financial instruments at fair value through profit or loss		4 018	–1 948

Net gains/losses on investment property
Net gains/losses on investment property	10	–839	1 047
Net gains/losses on own-use property (underlying item in VFA)	12	–41	–13
Total net gains/losses on investment property		–880	1 034
¹ Includes interest and dividend income of CHF 624 million (2022: CHF 260 million)
² Includes changes attributable to credit risk of nil (2022: nil)
³ Includes dividend income of CHF 1 million (2022: CHF 15 million)