Life Capital

Life Capitalʼs strategy is to create alternative access to attractive life and health risk pools.

Thierry Léger – CEO, Life Capital (photo)

“In 2017, Life Capital continued to see strong growth, both organic and inorganic; delivering against our strategy and strengthening our market position.”

Thierry Léger

CEO, Life Capital

Strategy and priorities

During 2017, the open book businesses saw significant growth in the number of policies sold. For the closed book business, ReAssure continued to pursue selective growth.

In October 2017, Swiss Re reached an agreement with MS&AD Insurance Group Holdings Inc (MS&AD) for an investment of up to GBP 800 million in ReAssure, strengthening its ability to pursue growth. In December, ReAssure agreed to purchase 1.1 million Legal & General life policies for GBP 650 million, in line with its strategy to acquire closed life books in the UK and further strengthen its market position.

Life Capital seeks to optimise capital and asset management and to maximise cash generation and return on equity. In the closed book business, the focus remains on achieving operational efficiencies by leveraging our operating platform. In the open book business, Life Capital continued to invest in its technology platform during 2017, to position both elipsLife and iptiQ to grasp growth opportunities in their respective businesses.


In 2017, net income for Life Capital was USD 161 million, a decline from USD 638 million in 2016, with the 2016 performance benefiting from large one-off realised gains on the investment portfolio that were, as expected, not repeated. The underlying performance in 2017 was supported by realised gains on sales of fixed income securities and favourable UK investment market performance.

The net operating margin in 2017 was 10.9% compared to 27.0% in the prior year, in line with movements in net income.

Life Capital generated significant gross cash of USD 998 million during 2017, compared to USD 721 million in the prior year. The gross cash generated in 2017 was driven by the strong underlying surplus on the ReAssure business. It further benefited from an update to mortality assumptions and the finalisation of the 2016 year-end Solvency II statutory valuation.

Life Capital paid a dividend of USD 1.1 billion to the Group during June 2017, driven by the strong capital position of the ReAssure business.

Life Capital results


USD millions



Change in %





Gross premiums written

1 489

1 761


Net premiums written




Change in unearned premiums



Premiums earned




Fee income from policyholders




Net investment income – non-participating business

1 256

1 193


Net realised investment gains/losses – non-participating business




Net investment result – unit-linked and with-profit business

5 367

3 234


Other revenues




Total revenues

8 320

5 969










Life and health benefits

–1 896

–1 872


Return credited to policyholders

–5 060

–3 179


Acquisition costs




Operating expenses




Total expenses before interest expenses

–7 522

–5 671






Income before interest and income tax expense




Interest expenses




Income before income tax expense




Income tax expense




Net income attributable to common shareholders





Gross premiums written increased by 18.3% to USD 1.8 billion during 2017, mainly driven by growth in the open book businesses, offsetting the run-off of the closed books, as well as foreign exchange rate movements. Net premiums earned increased from growth in the open book life and health insurance businesses.

Investment result

The return on investments was 3.4% for 2017, compared to 4.0% in 2016. The prior-year result included significant net realised gains from interest rate derivatives as well as higher net investment income.

Net investment income decreased by USD 48 million to USD 894 million in 2017, mainly due to a negative impact from foreign exchange rate movements.

Net realised gains decreased by USD 110 million to USD 111 million in 2017, reflecting the lower impact from interest rate derivatives.

Insurance-related investment results as well as foreign exchange gains/losses are not included in the figures above.

Operating expenses

Operating expenses were USD 514 million in 2017 compared to USD 503 million in 2016, including investment in 2017 for the open book expansion.

Shareholdersʼ equity

Common shareholdersʼ equity decreased by USD 0.2 billion to USD 7.1 billion, compared to 31 December 2016. The decrease was mainly driven by a USD 1.1 billion dividend paid to the Group, partially offset by net income and higher unrealised gains in 2017. The annualised return on equity was 2.2% for 2017, compared to 10.4% for 2016. The year-on-year decrease was due to lower net income in 2017.


Life Capital continues to pursue selective acquisition opportunities within the closed book market in the UK and is focused on growing its individual and group life and health businesses in Europe and the US. The ambition is to build a leading primary life and health business, with attractive returns for shareholders.