Life Capital

Life Capitalʼs strategy is to create alternative access to insurance risk pools.

Thierry Léger – CEO, Life Capital (photo)

“In 2018, Life Capital maintained strong growth in line with expectations as the unit continued its transition from a closed book to an open book business.”

Thierry Léger

CEO, Life Capital

Strategy and priorities

During 2018, the open book businesses continued their trend of significant policy growth, reaching new partners and distributors as well as expanding geographically.

The closed book business, ReAssure, continued to seek growth opportunities. The exploration of a potential initial public offering of the business (as announced in August 2018) continues but does not impede the business from considering additional closed life books to further strengthen its market position.

In December 2018, Swiss Re reached an agreement with MS&AD Insurance Group Holdings Inc (MS&AD) for a further investment of GBP 315 million in ReAssure. This transaction closed on 20 February 2019, resulting in a total shareholding by MS&AD in ReAssure of 25%.

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 its operating platform. In the open book business, Life Capital continues to prioritise its use of technology to enable both elipsLife and iptiQ to achieve efficiencies and growth opportunities in their respective businesses.

Life Capital results


USD millions



Change in %





Gross premiums written

1 761

2 739


Net premiums written


1 175


Change in unearned premiums



Premiums earned


1 172


Fee income from policyholders




Net investment income – non-participating business

1 193

1 256


Net realised investment gains/losses – non-participating business




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

3 234

–1 560

Other revenues



Total revenues

5 969

1 368










Life and health benefits

–1 872

–1 489


Return credited to policyholders

–3 179

1 038

Acquisition costs




Operating expenses




Total expenses before interest expenses

–5 671

–1 255






Income before interest and income tax expense




Interest expenses




Income before income tax expense




Income tax expense




Net income before attribution of non-controlling interests




Income attributable to non-controlling interests



Net income attributable to common shareholders





In 2018, net income for Life Capital was USD 23 million, a decline from USD 161 million in 2017. The underlying performance in 2018 benefited from realised gains on sales of fixed income securities and favourable underwriting experience which was more than offset by the impact of UK investment market underperformance and increased investment in open book business.

The net operating margin in 2018 was 3.9% compared to 10.9% in the prior year, in line with movements in net income.

Life Capital generated exceptional gross cash of USD 818 million during 2018, compared to USD 998 million in the prior year. The gross cash generated in 2018 was driven by the strong underlying surplus on the ReAssure business, the proceeds from MS&AD’s initial 5% stake in ReAssure and the finalisation of the 2017 year-end Solvency II statutory valuation, partially offset by valuation changes.

Life Capital paid a dividend of USD 1.1 billion to the Group in June 2018, driven by the strong capital position of the ReAssure business.


Gross premiums written increased by 55.5% to USD 2.7 billion during 2018, mainly driven by growth in the open book businesses including a large medex transaction for iptiQ EMEA, combined with the impact of intra-group retrocessions and 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 3.3% for 2018, compared to 3.4% in 2017, reflecting a decrease in the investment result of USD 84 million.

Net investment income decreased by USD 50 million to USD 844 million in 2018, mainly due to run-off within the closed book portfolios.

Net realised gains decreased by USD 34 million to USD 77 million in 2018, reflecting a reduction of gains from sales of fixed income securities.

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

Operating expenses

Operating expenses were USD 549 million in 2018 compared to USD 514 million in 2017, reflecting continued investment in the open book expansion and Legal & General Group (L&G) policy integration as well as the impact of unfavourable foreign exchange movements.

Shareholdersʼ equity

Common shareholdersʼ equity decreased by USD 2.0 billion to USD 5.1 billion, compared to 31 December 2017. The decrease was mainly driven by a USD 1.1 billion dividend paid to the Group and a USD 1.1 billion reduction of net unrealised investment gains in 2018. The return on equity was 0.4% for 2018, compared to 2.2% for 2017. The year-on-year decrease was due to lower net income in 2018.


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