Annual Report 2012 - Swiss Life

81 Market Consistent Embedded Value (MCEV)
SWITZERLAND
The MCEV almost doubled. The increase of the value of in-force business is driven by favourable
capital market developments as laid out in section 2.5 and better persistency and reduced expenses.
The higher net asset value results from a considerable annual profit achieved despite substantial balance
sheet strengthening. The free surplus increased by CHF 201 million due to operating earnings after
financing the new business production.
FRANCE
The MCEV of Swiss Life in France increased due to operating earnings and was supported by an overall
favourable capital market environment with both the net asset value and the value of in-force business
contributing positively.
GERMANY
Although the drop in reference rates generally has a strong effect in the German life insurance market
with its long-term guarantees, the decrease of MCEV was contained.
INTernational
Private Placement Life Insurance (PPLI) and Corporate Clients account each for about 50% of the
closing MCEV. The decrease of 6% is driven by a revised outlook on future new business volumes for
the PPLI business, which is partly offset by an improved MCEV of Corporate Clients.
The negative free surplus is explained by not taking into account the goodwill relating to a past
acquisition in Liechtenstein.
Swiss Life – Annual Report 2012