* Swiss Life Q3 premium income up 1 pct to 2.98 bln Sfr
* Poll was for premiums of 2.79 bln Sfr
* AWD sees sales fall 15 pct in Q3
* CFO says cannot rule out writedown
* Shares down 1.5 pct vs 0.7 pct sector loss
(Adds CFO comment, analyst quote, shares)
By Catherine Bosley
ZURICH, Nov 13 Swiss Life's
beleaguered financial advisory arm AWD suffered a decline in
sales in the third quarter, highlighting the challenges the
insurer faces in turning around the German unit.
Switzerland's biggest dedicated life insurer bought
Hanover-based AWD for 1.2 billion euros ($1.5 billion) in 2008.
But the division, whose main markets include Germany and
Austria, has struggled in recent years.
Profits have slipped, client advisers left and it has been
accused of improperly pushing products in Germany and Austria.
AWD has denied those allegations.
In the third quarter, AWD's sales fell 15 percent to 108
million euros, Swiss Life said on Tuesday, taking the shine off
higher than expected group premium income.
Swiss Life has already taken sizeable provisions for AWD and
is thoroughly reviewing the unit. The group will hold an
investor day on Nov. 28 when it may give further guidance on its
plans for AWD.
"We obviously cannot be satisfied with this development,"
Finance Chief Thomas Buess said, referring to the unit's latest
figures. "We cannot rule out a writedown."
Late last year, Swiss Life's then biggest individual
shareholder Carsten Maschmeyer cut his stake and said he would
leave the board because he was unhappy with how the probe into
AWD's sales tactics was being managed by the company.
However Tuesday's statement also showed a 1 percent rise in
third-quarter premium income for the group as a whole and a
strong investment result.
Swiss Life's premium income of 2.98 billion Swiss francs
topped an average forecast of 2.79 billion in a Reuters survey
of analysts. [ID:nL5E8M9D54
Despite low bond yields due to central banks' policies of
quantitative easing, Swiss Life recorded a non-annualised net
investment return of 3.8 percent for the period between January
and September, stronger than a year ago.
Shares in the firm, which have risen 35 percent so far this
year, were down 1.5 percent at 114.9 francs by 1108 GMT, against
a 0.7 percent fall in the European insurance sector.
"Due to the fact that Swiss Life is currently still able to
generate a decent profit in this harsh environment, we believe
the insurer deserves a higher valuation than the current level,"
said Sarasin analyst Martin Schwab.
The shares trade at around 6.3 times forecast 2013 earnings,
compared with an average multiple of 8.1 times for the European
sector as a whole, according to Thomson Reuters data.
($1 = 0.9482 Swiss francs)
(Editing by Mark Potter and David Holmes)