Ladies and gentlemen, welcome to the Swiss Life presentation of the half year results 2021 conference call and live webcast. I'm Hailey, the Conference Call Operator. I would like to remind you that all participants will be in a listen-only mode, and the conference is being recorded. The presentation will be followed by a Q&A session. You can register for questions at any time by pressing star and one on your telephone. Webcast viewers may submit their questions or comments in writing via the relative field. Kindly note that webcast questions will be answered after the call. For operator assistance, please press star and zero. The conference must not be recorded for publication or broadcast. At this time, it is my pleasure to hand over to Mr. Patrick Frost, Group CEO of Swiss Life. Please go ahead.
Dear analysts and investors, welcome to the Swiss Life half-year conference. Thank you for taking the time to join us today. As usual, following my initial appraisal of our half-year results, our CFO, Matthias Aellig, will go through our reporting in more detail. We will open the floor for questions. Swiss Life can look back on a successful H1. The results show that we are making excellent progress towards achieving all our goals under the Swiss Life 2021 corporate program. We again show significant improvements in our insurance advice and asset management businesses. We've come through the pandemic well as a company. We were able to grow in the areas of strategic relevance to us, such as the fee result, cash remittance, and profit from operations.
Not only compared to the first half of 2020, but also compared to H1 of 2019 before the COVID crisis. Let me provide some specific key figures from H1 of 2021 to support my statements. Net profit rose by 15% to CHF 618 million. The adjusted return on equity was 11.3%, which was significantly above our ambition in the context of our Swiss Life 2021 program. We grew fee income by 15% to around CHF 1.08 billion. The fee result was up by 14% to CHF 309 million. This is very pleasing and compares to a level of CHF 260 million in the first half of 2019.
The value of new business came to CHF 252 million, an increase of 24%. The new business margin increased to 3.1% against 2.1% previously. Finally, the cash remittance to the holding company rose yet again by 7% to CHF 798 million.
We're very well on track with the Swiss Life 2021 program and confirm the corresponding financial targets. We're thus creating a strong foundation for the further development of our group over the coming year. I now hand over to Matthias to provide a more detailed account of our figures.
Thank you, Patrick. Good morning, ladies and gentlemen. I will start with selected P&L figures on slide six. Gross written premiums, fees, and deposits received decreased by 7% in local currency to CHF 10.9 billion, mainly due to Switzerland. Fee and commission income was up by 15% in local currency to CHF 1.1 billion. All sources contributed positively. Asset managers, our own IFAs and the business with own and third-party products and services. The net investment result of the insurance portfolio for own risk increased to CHF 2.2 billion. Net insurance benefits and claims were down to CHF 7.7 billion as a result of premium development.
Policyholder participation increased to CHF 1.1 billion due to Switzerland, Germany, and France. We strengthened reserves by about CHF 100 million. As usual, final policyholder participation and reserve strengthening is determined at the end of the financial year. Operating expenses were CHF 1.8 billion. Profit from operations increased to CHF 876 million.
This is mainly due to higher savings in fee results, which more than offset a lower risk result. Borrowing costs increased slightly to CHF 62 million due to the early refinancing of a hybrid bond in March, the call date in September. Our income tax expense was CHF 196 million. The effective tax rate was 24% and thus a prior year level. Our net profit increased by 15% to CHF 618 million. Slide seven shows the adjustments to our profit from operations. We adjusted the profit from operations to reflect finance transformation expenses, which are the program costs related to the new accounting standards and systems.
The adjusted profit from operations increased by 13% to CHF 889 million. Moving now to the segment results, starting with Switzerland on slide eight. Premiums decreased by 20% to CHF 5.9 billion, primarily due to the group life business. The market was down by 11%.
Market figures are provided, as usual, by the Swiss Insurance Association. Effective 2021, the figures exclude one large competitor, which decided to leave the association. Premiums in individual life were down by 1% to CHF 689 million, while the market increased by 4%. Periodic premiums grew by 3%, while single premiums were down by 13%. Premiums in Group Life were down by 22% to CHF 5.2 billion, while the market decreased by 14%. Periodic premiums fell by 4%. Single premiums decreased by 38%. About three quarters of this decline in single Group Life premiums can be attributed to fewer new accounts, while the remaining quarter relates to lower entries of employees in existing schemes. We continued to focus on disciplined underwriting to protect and improve the quality of our full insurance book.
In this context, assets under management in our semi-autonomous foundations increased to CHF 5.4 billion, compared to CHF 4.8 billion at year-end 2020, or CHF 4.4 billion at the end of June 2020. The shift to growth in semi-autonomous solutions results in lower reported premiums. Only risk and cost premiums are recorded, where the savings components are recorded off balance sheet as net inflows in the respective foundation. This development is in line with our full range provider strategy and our established focus on quality before growth. Fee and commission income was up by 12% to CHF 157 million, primarily due to Swiss Life Select and our businesses with unit link and investment solutions for private clients. Our mortgage and real estate brokerage businesses also contributed positively.
Operating expenses increased by 4% to CHF 200 million, driven by the insourcing of mortgage administration and investments in growth projects, such as further digitalization of the advisory model and process optimization. The segment result increased by 10% to CHF 458 million, primarily due to higher savings result supported by more friendly markets. The risk and cost results were marginally higher. The fee result increased by 23% to CHF 17 million, supported by Swiss Life Select, investment solutions for private clients and other effects. The value of new business is essentially stable at CHF 88 million. The active new business steering in this low interest rate environment led to higher shares of capital life products in both individual life and Group Life. The new business margin increased to 4.4%. Turning now to France. Please note that all figures quoted are in euros for our France, Germany, and the international segment.
In France, premiums increased by 27% to CHF 3.5 billion. The market grew by 25%. In our life business, premiums were up by 38% due to continued demand for our new pension products following an already strong growth in the prior year. The market was up by 42%, which compares to a heavily depressed first half in 2020. The unit-linked share in our life premiums was 58%, compared to the market average of 38%. Life net inflows were CHF 1.2 billion, versus overall market net inflows of CHF 10.9 billion. Health and protection premiums increased by 6%, mainly driven by the Group's business. The market was up by 4%. P&C premiums were up by 11%, primarily due to motor products. Market growth was 4%. Fee and commission income rose by 21% to CHF 183 million.
Unit-linked fee income increased as a result of higher unit-linked reserves, which grew due to net inflows and a more favorable financial market environment. We also generated higher revenues from structured products. Operating expenses increased by 1% to CHF 172 million due to business growth and investments in growth projects such as Credit Life and digital client solutions. The segment result increased by 6% to CHF 132 million. The savings result developed positively based on a higher net investment result. The cost result declined due to higher acquisition costs related to strong new business growth in Life. The risk result decreased considerably as the prior year period benefited from very low health and P&C claims in the context of COVID-19. Moreover, in 2021, coverage in health increased based on a governmental prescription affecting the entire French health insurance sector.
The fee result was up by 27% to CHF 49 million, in line with the income development. The strong increase in value of new business by 43% to CHF 94 million was driven by higher volumes in both Life and Health & Protection. The new business margin decreased slightly to 2.3%, mainly due to the higher health coverage mentioned before. Moving on to Germany on slide 10. Premiums were up by 5% to CHF 661 million due to modern, traditional, and disability products. The market was down by 2%. Fee and commission income grew by 19% to CHF 295 million due to strong contribution from our owned IFAs based on an increased number of financial advisors. This top-line development also included, as mentioned in the last Q1 call, an extraordinary benefit of around CHF 15 million.
It relates to a successful campaign based on the solidarity surcharge, which has discontinued for the majority of the German population at the beginning of 2021. The number of financial advisors increased by 18% year on year to 5,107. Operating expenses were up by 3% to CHF 115 million because of business growth as well as ongoing investments in growth initiatives such as digital tools and interfaces for advisors, customers, and product partners. The segment result was up by 41% to CHF 130 million. All profit sources contributed to the positive development, primarily the savings and fee result. The savings result increased due to an exceptionally high net investment result based on high revaluation gains on investment. We again realized fixed income instruments in the context of the ZZR financing for the entire financial year. We do not expect further ZZR-related fixed income realization in 2021.
In other words, there is a front-loading of the savings result of about EUR 20 million, with no repetition in H2 of 2021. The fee result was up by 26% to EUR 55 million, driven by strong business development at our owned IFAs. The value of new business increased by 36% to EUR 37 million, mainly due to increased volumes in modern and risk products. In addition, the guarantees of modern traditional products were further reduced. The new business margin improved to 3.4%. Turning now to the international segment. Premiums decreased by 35% to EUR 451 million due to lower premiums with private clients in Europe that were partly offset by higher premiums with private clients in Asia and with corporate clients.
Fee and commission income was up by 15% to CHF 151 million, driven by higher contributions from our owned IFAs, both in the U.K. and CEE, while the income with private and corporate clients was stable. Operating expenses increased by 4% to CHF 50 million due to investments in process optimization and digitalization. The segment result was up by 17% to CHF 42 million, with a higher contribution from all lines of business. The fee and savings results developed positively, while the other profit sources were essentially stable. The fee result increased by 23% to CHF 32 million. This is due to our owned IFAs achieving higher revenues and productivity gains, resulting as an example from virtual advice. The value of new business increased by 7% to CHF 19 million, mainly driven by higher volumes in risk business. The new business margin advanced to 4.7%.
Let's move now to our Asset Managers segment that reports in Swiss francs. Asset Managers' total income was up by 6% to CHF 445 million. The increase was driven by higher recurring income. In our PAM business, total income was up by 3% to CHF 183 million. Higher recurring income due to a higher average asset base was partly offset by lower real estate transaction fees. In our TPAM business, total income was up by 8% to CHF 262 million. Recurring income increased by 18%, given a higher average asset base. Non-recurring income was down by CHF 13 million due to lower other net income from gains on ongoing and completed real estate development projects. Other non-recurring income, such as performance and transaction fees, was stable. The share of total non-recurring income for TPAM was 16% of total income compared to 23% in the prior year period.
Operating expenses increased by 6% to CHF 267 million due to further growth, process optimization, and investments in digitalization. This included the discontinued use and thus derecognition of a brand asset of CHF 7 million in the context of the merger of Corpus Sireo into Swiss Life Asset Managers Germany. The segment result increased by 4% to CHF 140 million. PAM was roughly stable at CHF 97 million. Higher income was more than offset by higher expenses related to long-term real estate projects, such as a large development project in Basel. TPAM increased its segment results contribution by 16% to CHF 43 million, due to growing recurring income, combined with an improved cost-income ratio, which is partly offset by lower other net income. We expect other net income to catch up in H2 of the year.
Net new assets in our TPAM business amounted to CHF 4.6 billion, compared to CHF 1.4 billion in the first six months of 2020. We achieved strong inflows in real assets of CHF 2.2 billion, thereof CHF 2.0 billion from real estate and CHF 0.2 billion from infrastructure. This is above the 2020 level, when we achieved inflows in real assets of CHF 1.6 billion. Inflows in other asset classes amounted to CHF 1.7 billion in money market funds, CHF 0.4 billion in bonds and balanced mandates, and CHF 0.3 billion in equities. Excluding money market funds, net new assets amounted to CHF 2.9 billion, compared to CHF 2.4 billion in the prior year period.
Overall, assets under management in our TPAM business were up to CHF 98.9 billion, compared to CHF 91.6 billion at year-end 2020, and CHF 82.9 billion by mid-year 2020. The drivers were strong net new assets, supported by market performance and favorable FX effects.
Total Assets Under Management came to CHF 274.4 billion. Let's move now back to the group on Slide 13. Total operating expenses increased by 11% to CHF 1.8 billion, primarily due to high commission expenses. Operating expenses adjusted increased by 3% to CHF 863 million. Direct investment income, on Slide 14, decreased by around CHF 55 million to CHF 1.97 billion. Our non-annualized direct investment yield was 1.1%. Income on bonds was down due to past bond realizations and lower reinvestment yields. Income on equities was also lower due to reduced average exposure in nominal terms compared to the prior year period, and thus lower dividend payments.
This was partly offset by higher rental income that increased by CHF 45 million. About half of this increase was related to new fund consolidations. The other half was due to higher rental income on a growing real estate asset base.
Rental income included effective rental losses of less than CHF 10 million in the context of COVID-19, as well as higher operating expenditures, which are always netted in our total rental income. The net investment result increased to CHF 2.2 billion. The non-annualized net investment yield was 1.3%, compared to 1.1% in the prior year period. Net capital gains amounted to CHF 422 million. This increase, compared to the prior year, is primarily due to higher revaluation gains in real estate and net capital gains on loans and alternative investments, as well as a substantially improved FX hedging effect, including a decrease in hedging cost to CHF 174 million from CHF 336 million in the prior year period.
Those positive effects were partly offset by lower gains on bonds and negative P&L contributions of the hedged equity portfolio, including valuation losses on equity hedging derivatives in the context of a positive market environment.
Unrealized gains within the equity portfolio are recognized as other comprehensive income. Unrealized net gains on equities were CHF 2.9 billion, compared to CHF 1.6 billion at year-end 2020. Unrealized net gains on bonds amounted to CHF 13.2 billion, compared to CHF 18.2 billion at year-end 2020. Our total investment results, including changes in unrealized gains and losses on investments, fell to minus 0.9% as a result of higher interest rates. Slide 15 shows the structure of our investment portfolio. The asset mix remained essentially in line with the year-end 2020.
The share of bonds declined, primarily due to lower valuations resulting from higher interest rates. The real estate exposure increased to 22.6% and includes further real estate revaluations of CHF 0.5 billion and further net acquisitions of CHF 0.3 billion. The share of equities increased in line with favorable financial markets. Our net equity exposure after hedging amounted to 4.4%.
Let me give some additional color on the real estate portfolio. Our vacancy rate decreased to 4.2% compared to 4.7% at the end of the first quarter of the year. This was due to reletting activities, as mentioned in the Q1 2021 call. We expect vacancy rates for the year-end to remain at around the current level. Rent collections amounted to around 98% of rental income due, compared to 95% in the prior year period. The majority of uncollected rent in the context of COVID-19 is due to rent deferrals, as rent losses amounted to less than CHF 10 million. Insurance reserves, excluding policyholder participation liabilities on Slide 16, increased by 2% in local currency to CHF 157.75 billion, primarily due to France, International, and Germany. Shareholders' equity decreased by 6% to CHF 15.7 billion compared to year-end 2020.
This is due to lower net unrealized gains in bonds, the share buyback completed in May, and the dividend paid, which was partly offset by the net profit attributable to shareholders. Our total outstanding financing instruments amounted to CHF 4.9 billion, including an overlap from the early refinancing of hybrid bond in March with a call date in September this year. That brings me to the Swiss Life 2021 financial targets and how we have progressed. Let me start with the development of our fee business on Slide 20. Fee and commission income increased by 15% in local currency to CHF 1.1 billion. Commission income at Swiss Life Asset Managers was up by 9% in local currency. This was primarily due to TPAM. As usual, commission income on this slide excludes other net income, such as income from real estate project development.
Commission income from owned IFAs increased by 19% in local currency, while commission income from own and third-party products and services was up by 17%. The fee result increased by 14% to CHF 309 million. This is very pleasing and compares to a pre-COVID level of CHF 260 million in the first half of 2019. Let me also briefly comment on the other profit sources. The savings result increased year on year due to a high net investment result, primarily due to France and Germany. It is now essentially back in the half-year 2019 level. The risk result, as I mentioned earlier, decreased primarily due to France. It is around the half-year 2019 level. The cost result remained stable year on year and is also around the level of the first half of 2019. The half year 2021 profit from operations was CHF 876 million, as initially said.
This compares to a pre-COVID level of CHF 830 million in the first six months of 2019. As just explained, the growth stems essentially from the fee result. Slide 22 shows our non-annualized direct and net investment yields. This compares to an annualized reinvestment rate of 1.2% in the first six months of 2021. Our average technical interest rate in Slide 23 decreased by 2 basis points to 1.03%, driven by business mix effects. Slide 24 shows our new business margin of 3.1%. This compares to 2.1% in the prior year period and to our ambition level of 1.5%. The increase is primarily due to an improved business mix with a focus on capital light business with low or no guarantees at all. In this persistently low interest rate environment, our value of new business increased by 24% to CHF 252 million. Let me now move on to operational efficiency.
In life insurance, the efficiency ratio was essentially stable at 18 basis points. At our owned IFAs, the distribution operating expense ratio improved to 21%, primarily due to Germany and the benefits from the solidarity surcharge, as well as due to International. In our TPAM business, the cost-income ratio improved to 84%, in line with growing net commission income and improved operational leverage. The half year 2021 ratio included the derecognition of a brand asset. On an adjusted basis, the ratio was 80% compared to 86% in the prior year period. As usual, the cost-income ratio tends to be higher in H1 of the year as the operating expenses are more linearly incurred, while the income is more back-end loaded within the year. Turning to capital cash and payout on slide 26.
By the end of June 2021, our Swiss Solvency Test ratio is estimated to be around 205%. As of today, the SST ratio is at about the same level. This compares to an SST ratio of 197% at the beginning of the year, shown on slide 27, together with the SST sensitivities as of January 1, 2021. In the first six months of 2021, cash remittance to the holding company increased by 7% to CHF 798 million. Cash at holding as of today amounts to CHF 0.8 billion compared to slightly more than CHF 1 billion at year-end 2020. The current cash level includes the cash remittances to the holding company just mentioned, as well as outflows for the dividend payment of CHF 21 per share, including the withholding tax. It is also net of the completed CHF 400 million share buyback and the DOJ payment of CHF 70 million.
Our past cash comfort level of CHF 0.8 billion-CHF 1 billion was taking into consideration a potential DOJ payment. Our new cash comfort level going forward is CHF 0.7 billion-CHF 0.9 billion. Let me sum up and reiterate Patrick's earlier comments. I'm very pleased with the strong performance of Swiss Life 2021 so far, especially with the development of the fee business. We have again improved the quality of our earnings and demonstrated the resilience and strength of our business model in an environment that remains challenging. We are very well on track with our Swiss Life 2021 program, and I can again confirm all Swiss Life 2021 financial targets. We will report new targets for the next strategic program this fall on November 25th. We look forward to welcoming many of you in Zurich. Thank you for listening, and back to you, Patrick.
Thank you, Matthias. We're now ready for your questions. Who'd like to go first?
The first question is from the line of Andrew Sinclair of Bank of America. Please go ahead.
Thanks. Morning to you from me as usual, if that's okay. Just on remittance, really helpful details that you've given. I just really wanted to check. I know remittance tends to be H1 weighted. Just really wondered if you're expecting any more in H2 this year. Was just on your debt position. You mentioned the refinancing of the CHF 450 million call on September, but I think you've also got about CHF 200 million of senior maturing in H2. Just really wondered if you could give us your thoughts on whether you'd like to refinance that or would you be bringing debts a bit lower in your leverage range. I just really wondered if you could give us the actual numbers for the risk and savings results at half year.
It seems to have been pretty strong savings result, Switzerland and Germany, maybe a bit tougher in risk result in France. Just for a group level would be useful. It'd just be really useful to have that split at half year as well as full year. Thanks.
Thanks, Andy. Happy to take your questions. In terms of the remittances, we have the typical pattern that you mentioned, that we get most of it in the first half year, and there's essentially no big remittance to be expected in H2. There is stuff like some fees, interest, and loans and the like. There's probably nothing more to expect than what has come in the prior year. That's around maybe CHF 35 million-CHF 40 million is that order of magnitude. In terms of the debt position, yes, we have refinanced the hybrid due in September in already March, taking advantage of the environment. We tend to have a tendency of early refinancing, and that's what has happened to the hybrid debt position is also something to be expected for the senior bond coming due in December.
Given the early refinancing, and I think that's what you probably refer to, there was a slight deviation in the reference level with the call of the hybrid in September. We expect to be within the range. In terms of the PBS, the profit by source, we have an established practice of disclosing the full year numbers, including the business division slides. I think what has been very particular this year was that the prior year was very strongly affected, as mentioned, by the COVID-19 situation, which meant for 2020, a strong reduction in the savings result, given the development in the capital markets back in 2020. As mentioned, we are now back essentially on a level of pre-COVID-19 in terms of savings result, despite the ongoing low interest rate level.
In terms of risk result, and I think that's important to stress, we had, as mentioned before, essentially nothing to report in the life insurance part of the risk result, but we had excess gains in health and P&C in France in the prior half year. You may recall that in the full year, it is normalized as these benefits got taxed away by the French government. Half year 2021, we had really an extraordinarily high risk result, which now has come back in the more normalized situation.
Understood. Thanks.
The next question is the line of Michael Huttner of Berenberg. Please go ahead.
Thank you very much. Lovely results. Thank you. A few questions. Cash guidance, expenses, and COVID-19. On cash guidance, you've reduced your comfort guidance range. I was just wondering, it's a very cheeky question. Does this mean we're more likely to see buybacks at some stage in the medium term? Given that Solvency is extraordinary, now you've reduced the hurdle or the benchmark for cash to be retained. The second is on expenses. I was just wondering, expenses to me seem to have grown a lot. You've mentioned in various countries, investment in digital processes and various bits, which is lovely. I just wondered how much of the growth and expenses can be related to these kind of investments in longer term projects, rather than the day-to-day. It's just to get a feel for what growth might come from these extra investments.
Then the last one is COVID-19. This is a real very vague question. It seems as if there's no crisis anymore. It's almost back to normal. I just wondered if I think very high level, how can I picture or how do you see the world post the pandemic? How different is it? How would that affect your strategy? It really is an open question. Obviously, I don't know the answer. We all imagine more working from home and stuff like that, but there we are. Thank you.
I'll take the last question first. As most others, we're not sure how the whole thing will spell out, but we're quite optimistic that we'll continue to do well in this post-pandemic world. Yes, of course, there are some discussions around vacancies in the real estate portfolio, but we're confident, and we still don't see any issues for our office portfolio. Why? Because we have these very good locations in the inner cities. Still see a strong demand. Of course, we'll have a bit more working from home than pre-crisis. Of course, we've had some benefits, especially last year, in our IFA business because people were willing to listen to our advisors. Maybe going forward, once everything is normalized, we'll see less growth here. I think the main impact from the pandemic came from the savings result and the level of rates.
This is by far more important for us how the post-pandemic world will affect financial markets than, let's say, what the impacts are on home office or the IFA business, et cetera. We continue to depend on financial markets.
I'll hand over to Matthias for the other 2 questions.
Thank you, Patrick. Let me start first with the question on the cash level. As mentioned, we have the reduction of the cash comfort level, which is driven by the settlement of the DOJ payment. In the past, we have earmarked, if you wish, a certain amount for a potential claim. This now has been settled. The cash that was at holding has been reduced, and that's the reason for this adjustment of the cash comfort level. The settlement that we reported about in May this year. Coming, let's say, to the more broad question you raised, in terms of share buyback, we have the established framework we talk about every call. I will not go through the details, but the two criteria that we have in place, the SST and the cash level, that's completely unchanged, and there's nothing new to report there.
In terms of the expenses, as you mentioned, we have strong business activities, and some of the expenses are more or less directly related to the business activities. There are phone calls that need to be taken, transfers that need to be organized. There's one driver, which is really a very operational increase, which goes with the business activities. As you mentioned, we also continue to invest into the further development of the business. I think we find here a good balance between, let's say, profit and investments into growth. Clearly, those investments we focus in terms of strategic growth areas that we have going forward.
I think what is probably also important to note, and I mentioned that in the speech, on page 13 where we show the expenses, the larger part of the increase is driven by commission, so the new business activities, and on an adjusted base, scope, FX and the like, the growth is 3%.
Brilliant. Thank you.
As a reminder, if you wish to register for a question, please press star and one on your telephone. The next question is from the line of Peter Elliott of Kepler Cheuvreux. Please go ahead.
Thank you very much. A few follow-ups, please, actually. Firstly, on coming back to the risk result. A great set of results overall, but that was probably the one area where I was maybe a little bit optimistic. If I look back, I guess last year for 2020, you were sort of ended at the lower end of your range, and it seems like you're maybe a little bit behind the sort of 2020 run rate, especially in France. I'm just wondering how I should think about the outlook there. Is the room to sort of improve that? I guess in France in particular, you had a run rate of about CHF 100 million a year pre-COVID. Is that an appropriate level going forward? Any more sort of detail you could give us there would be very helpful.
Coming back to the capital structure, appreciate the refinancing, et cetera. If I make that adjustment, I think you're basically at 70% or 70 point something, towards the bottom of the range. I'm just wondering, how do you think of your sort of flexibility there? Yeah, that'd be great. Any thoughts? Finally, on the cash holding, the comfort, the CHF 700-900. Is that something we should now think of as a long-term level? Is there anything else that's sort of in your thinking there that might change over the near term? I guess the DOJ was an obvious one, maybe there is nothing else. It'd be useful to think of that to understand whether there's anything that might drive that to change in the future. Thank you very much.
Okay. Let me start with the last question. Yes, the CHF 700 million-CHF 900 million, that's something we think about as a long-term level given the business structure that we have. We have said the trigger was to actually review and adjust the cash comfort level in the current period. In terms of the adjustment to the reference level, if you adjust that, we are at 71%. Clearly the reference level, it's called reference level, and there is a range. It's not the point. We give 70%-75%. As an example, at full year 2020, we were at 72%. There is a range, and we also say there is a range for it. This means it's not an extremely tight thing.
In terms of risk result, let me first start with the fact that we have confirmed all Swiss Life 2021 targets, including the risk result, which we have with a goal of CHF 400 million to CHF 450 million for the full year 2021. I think in terms of France, which you rightly point out as the pivotal point here in the risk result discussion, 2020 was certainly not a year where we had a normal run rate. There were so many effects that affected the 2020 results. Let me remind us of the key drivers. In the first half of the year, we had, as mentioned, vast excess gains in health and P&C. Why was that? People did not drive anymore to the same level as before the pandemic.
There was less claims in home insurance, and particularly people could go less often to see dentists, the opticians, and the physicians.
As a result, we had a much lower claims level in the half year 2020. Those benefits got then, as mentioned, taxed away by the French government. They imposed a premium tax in health, which essentially cost us, I think, EUR 42 million in the second half of the year. This EUR 42 million refer to both the 2020 and the 2021 health business, but the full amount of EUR 42 million was recognized in the financial year 2020. What we also have in France that comes a bit to the current year outlook, there was the introduction of a new governmental prescription in the health business that this 100% Santé or as the French call it, which puts the burden for the health claims more on the French state and the insurance sector.
This has already last year, but more prominently this year, led to a worsening of the claims ratio in the health business. As a result, we see the French risk result clearly under pressure this year, this will also have an effect on the group's total risk result for 2021. As mentioned, we confirm the goals of CHF 400 million-CHF 450 million.
Great. Thanks very much.
The next question is the line of Fulin Liang of Morgan Stanley. Please go ahead.
Thank you. I've got two questions, please. The first one is, I noticed there isn't much reserve enhancements during H1 of 2021. Just wondering, does that mean actually is the whole interest rate downwards pressure on your liability side is approaching an end? Looking forward, what's your expectation on that one? The first one. Your cost-income ratio of TPAM business is 75% end of this year, while your current cost-income ratio is 80% for the first half, adjusted by the brand write-off issue. Does that mean that we should be expecting roughly 60% cost-income ratio in H2 of 2021? Thank you. Oh, sorry, 70% of 2021, sorry.
Okay. Let me start with the first question on reserving. We assess the reserves always for each valuation date, and we have to apply the guidance of the Swiss Association of Actuaries. What is driving, simply spoken, the reserving assessment is clearly the assets we hold, the returns we expect on the assets we hold, but also clearly the yields at which we reinvest. Simply speaking, in the end, the result of that aggregate is then the statement whether we need, and by how much, to further strengthen the results. What now has happened in H1 of the year until 30th of June is that rates in Swiss franc and euro have increased considerably, and this has clearly eased the pressure on the reserving positions. To be frank, we do not know how capital market interest rates will develop over the path.
We don't know how this will develop going forward. That said, we do this reassessment at each and every closing. In terms of the cost-income ratio, the target that we give for the Swiss Life 2021 Program is around 75. Around 75 is the goal that we have said, and we have confirmed that level. What is the dynamics? There is typically, and it's a pattern that we observe every year, that the first half of the year typically has higher cost-income ratios. Why is that? Many of the, let's say, transactions that contribute to non-recurring income, such as development fees, transaction fees, and the like, they are coming more towards the end of the year. While the expenses are incurred more linearly. Yes, we expect a similar trend this year.
Thank you.
We have a follow-up question from the line of Michael Huttner. Please go ahead.
Thank you so much. I was going to ask you on that topic, how much could we expect? Because you gave us the mix 16% in this H1 of transaction fees versus 23% last year. I just wondered whether you have an amount in mind or some guidance. The second is the amazing new business margin in Switzerland, the 4.4%. Is there anything unusual in there? How sustainable is it? Because this doesn't look like Switzerland, which is a low interest rate country. It looks like, I don't know, Italy or something. The last question is on I'm hesitating, but on the IFAs. You grew in Germany 18% to 5,100. Is there any kind of limit, or can you just keep growing?
Let me start first with the new business margin Switzerland. The 4.4% is really driven by both an improved business mix within the Swiss individual and the Swiss group life business. In the Swiss individual business, we now have a further increased share of capital light products. There's 1 product that even has a negative interest rate guarantee. On the other part of the business, or the product, even a unit-linked, a share of maybe 60%, 70%. It's a hybrid product. Also in the group life business, we have had this reduction of the full insurance part in the new business, which you also have seen as a premium reduction. On the other hand, we also have written a lot of semi-autonomous and risk business in the group life business. This one is less visible in the premiums, as mentioned.
This is clear, let's say, shift towards a unit-linked business that has driven this increase of new business margin to 4.4%. To come to your initial question, no, there's nothing funny in it. It's just a change in the business mix, if you wish. How sustainable is it? The 4.4% is essentially three times the ambition level. Per se, there's no problem if this margin comes back. As mentioned on previous occasions, we do not optimize the margin per se, but we want to maximize the value of new business. Over time, clearly the P&L contribution of the business. It's perfectly conceivable that this margin can also come down a bit. This is the way we also view the business. In terms of the non-recurring income, it's a bit stating the obvious, and sorry for that.
As mentioned, we expect the share of non-recurring clearly to be higher versus the end of the year. Those activities are back-end loaded within the year. As an example, in the last year, we had the 23% at half year. At full year, we were at 30%. The nature of the business is that it's a bit difficult to predict. We are a half year bit behind last year, and this is likely also to be the case in terms of share for the full year. Coming to the third question, we are growing nicely. In Germany, we have added 18% of IFAs, and clearly we are working hard to continue the growth. Clearly, we also need to make sure that we can maintain the quality of the education, the processes, and the like. That's probably the stuff I can mention here.
Wonderful. Thank you.
The next question is from the line of René Locher at Stifel. Please go ahead.
Yes. Good morning, all. four questions, if I may. The first one is a simple one on slide eight. You're showing here that the market in group life decreased by 14%. Possibly now, I think this is only traditional. The second question is on slide 10. Here also from my understanding, we can see very strong fee income. I was wondering, how do you finance the ZZR? Is this just out of the insurance business, or can you use part of the strong fee result to finance the ZZR? On slide 28. Here again, I guess it's a little bit of a misunderstanding from my side, but I always thought that the current year cash remittance depends on the net profit achieved last year. Now last year's net profit was down from 13%, and despite that, the cash remittance is up by 7%.
Yeah, was kind of a misunderstanding from my side, I guess. Last but not least, on slide 36. I see you have very strong direct investment income in real estate, and also the revaluation gains are substantially up year-over-year. Perhaps you can shed some light here on this positive development in real estate, and perhaps you can also elaborate what is the impact from The Circle at the airport. Thank you.
I'll give it a try. Yes, on the premium development, of course, primarily driven by our BVG business. That's also the reason why we had this 20% reduction in premiums. Of course, the individual life market has done better, and especially the periodic premiums. You're right, it's primarily driven by the BVG group life business. That's both the overall market and of course, our figures. On Germany, the ZZR, that is only financed within the insurance portfolio. It doesn't have anything to do with the fee result. Here, what happens, and remember, the reason why this increases the IFRS figures, if we do gains realization, is because the statutory liabilities created by the ZZR are not reflected in the IFRS best estimates. That's the reason why there is basically a neutral statutory effect by realizing bonds and increasing the ZZR.
There is a positive IFRS impact, which Matthias quantified as being around CHF 20 million. On the remittance question, there is a very similar effect. The cash remittance, of course, it depends on the results of last year, but it depends on the statutory results of last year. Primarily, that's one of the key drivers. That's why you have some discrepancies of the IFRS results and the cash remittance. The cash remittance was driven by AM, Asset Managers, the German IFAs, and international. The last question was on page 36, so around investment income. Here, I guess the positive point is that we have a bounce back now of rental income of around CHF 50 million. There we've already included some income from The Circle, which is the development which was almost completed towards the end of last year. It's not totally completed yet.
We expect a further increase of rental income coming from The Circle this year and then again next year. We'll have some tailwind here going forward. The other key points that Matthias mentioned, of course, we had a bit of a reduction on the bond income. Why? Because of gains realizations last year. Of course, the slowdown of direct investment income has slowed. Over the last 11 years, I think we had, it was about 7 basis points per year, which direct investment income yields came down last year. It was a lot more. I think it was around 20 basis points. We were back to normal, more or less. Sorry, I'm always talking off your figures here. Of course, we've had a big swing in equity contributions to net investment income.
I think what is also notable is that equities, a bit counterintuitively, have contributed negatively to net investment income. That implicitly means we've had a big buildup of unrealized gains in the equity portfolio, which was up to CHF 2.9 billion at half year, if I recall correctly. Of course, we've also had a well-flagged benefit from much lower hedging costs this year compared to half year. I think you also saw the improvement of the real estate revaluation gains, which by the way, again, were in all sub-segments. Residential, retail, and commercial real estate all experienced positive revaluation gains. Again, this half year as was the case last year.
Okay. Thank you very much.
The next question is from the line of Snehlata Singh of Citi. Please go ahead.
Yes. Hi. Thanks for taking my questions. Business France, which is likely interesting in terms of the premium growth on a continuous basis. In Q1, we saw 17% growth, and in this quarter also there's a huge growth. I believe there's easy comparator or comparable last year. How should we think about it going forward? That's my first question. Second on international segment, if you compare the Q2 premiums, it was 50% down year-on-year, largely maybe the lower contribution from private clients. Here also, how should we think it going forward in a normalized rate? What are the challenges you are facing, and how do we see it going forward? Third, on the cash remittances, I believe you gave a breakup by business line in your annual slides previously.
Can you just provide any indication of half-yearly cash remittances, given that largely the remittances happen in first half only? What is the breakup by business lines, if any indication that will be helpful. Thank you.
Okay. Let me take the question on France. As you said, we have achieved strong growth in the French business, particularly in the life business in France. The driver of that started essentially in 2019. A new law was established in France. It is called Loi PACTE or PACTE law. This created the prerequisite for a new product generation. Swiss Life France was very quick, if not the first among the first companies to offer that new pension product, which is characterized by a very high share of unit-linked. That's an area where we have a strong expertise. This really has been the growth driver for the past let's say, 24 months almost. We first established the individual version of that product and then rolled out the group version of that product.
If you look at that product in isolation, this pension PACTE product, we have a market share in that product area that is well above, let's say, our natural market share. If you also look at the inflows that we generate, the CHF 1.2 billion mentioned compared to the market of CHF 10.9 billion, we have an above average, let's say, market share. To be frank, we always think at one point in time, this will attract competition from other companies. So far, we managed to grow in that particular area above our natural market share. How long we can do that, I think, is difficult to assess. So far, we have the right ingredients if you wish to be competitive and outperform the market there. In terms of international, yes, you mentioned the dynamics. We had discussions last year, mostly lockdowns affecting Asia.
We had lockdown situations affecting Europe this year. This is a business where we have big tickets and one or two big tickets may really change the picture quarter on quarter. I think it is difficult as a result to really give an indication of premiums forecast. Structurally, there is demand for that product type. We are also rolling out a new version with an increased risk coverage also in Europe. We are positive that the market is picking up.
In terms of the cash remittance, in terms of segments, let me give the following indication. What has been driving the increase of cash remittance versus prior year is AUM Asset Managers, which is a fee business. We have also seen an increased contribution from our German IFA business, also fee business and also international could increase the cash remittance versus prior year.
Okay. Thank you. Yep.
We have another follow-up question from the line of Michael Huttner. Please go ahead.
Yes. Sorry about that, and thank you. It was just on the investment income from equities. This was down from CHF 193 to CHF 146. I tried to compare with last year's figures, and I'm probably reading them wrong, but it looks as if you had less equities last year. The half year last year, 2.7% net of hedges. This year, 4.4%. Gross of hedges, 8.2% last year, 9.9% this year. Has there been a shift somewhere?
I think what is always important here, of course, on the one hand, the dividend yields, but it's the underlying portfolio you mentioned, and the combination of both just led to this decrease of about CHF 50 million in direct investment income, if you compare half year 2021 with the half year in last year. It's really the nominal level. What we mostly talk about is the hedged equity levels, which is now at around 4.5%, if I recall correctly. Last year, I think it was around 3-ish.
Understand. Brilliant. Thank you.
There are no more questions at this time. I would like to turn the conference back over to the speaker for any closing comments.
That brings us to the end of our conference. Again, thank you for your time, and I look forward to seeing you again in November. In the meantime, I wish you a pleasant rest of the summer, good health, and all the best. Thank you, and see you soon.