* Q1 premium income down 1 pct from year earlier
* Premiums at high-net worth unit fall 41 pct
* CFO cites "uncertainties" in cross-border private banking
* Income from Swiss market rises by 7 pct
(Updates with share price, adds analyst, CFO comment)
By Joshua Franklin
ZURICH, May 13 Swiss Life on Tuesday
reported a 1 percent fall in overall premium income in the first
quarter and its division that manages wealthy people's money
reported a steep drop in sales.
Switzerland's biggest dedicated life insurer said income
from its high net worth business fell 41 percent to 404 million
Swiss francs ($455 million). Overall premium income totalled 6.9
billion francs in the quarter, down from 7 billion in the same
period last year.
The high net worth arm sells products known as insurance
wrappers, or Private Placement Life Insurance (PPLI), into which
the very wealthy place stocks, private equity holdings and other
bankable assets, allowing them to lower their tax rates.
There has been speculation that some Swiss insurers could
become caught up in a U.S. Justice Department investigation into
whether wealthy Americans avoided taxes using Swiss bank
"The development in our high net worth individual business
was a result of uncertainties around the cross-border private
banking environment," Chief Financial Officer Thomas Buess told
investors and analysts.
Swiss Life had ceased to write new business for clients
based in the United States in 2012 and the company reiterated on
Tuesday that it did not expect to be caught up in the
"We have at this stage no indication that there could be any
legal procedures in line with this book," Buess said. "Of course
you could never exclude this, but at this stage there's no
There are currently 14 Swiss bank under formal investigation
for their dealings with U.S. clients and untaxed assets. Swiss
Life said it had not been approached by U.S. authorities for
Shares in Swiss Life were 2.9 percent lower at 212 francs by
1140 GMT, making it the weakest performer in the European
Before the results, shares in Swiss Life had risen by almost
18 percent since the start of the year, outperforming the
broadly flat insurance index.
"International, which comprises the PPLI and corporate
business, is relatively volatile in nature and we would not read
too much into one quarter," Helvea analyst Daniel Bischof wrote
in a note.
Premium income in Switzerland, Swiss Life's largest market,
provided a bright spot, rising 7 percent to 4.9 billion francs.
The company said this was driven by strong demand in its pension
fund business from small and medium-sized businesses and growth
in individual life business.
Its second-biggest market, France, reported a 4 percent fall
to 1.2 billion francs, while Germany dropped 14 percent.
"The first-quarter statement will be taken as a
disappointment because of the weak international business,"
Zuercher Kantonalbank analyst Georg Marti said. He rates the
stock at "overweight."
The group's solvency ratio - a measure of an insurer's
ability to meet future claims - strengthened by 16 percentage
points from its year-end level to 226 percent.
($1 = 0.8878 Swiss Francs)
(Reporting by Joshua Franklin; Editing by Kenneth Maxwell and