Swiss Life said on Tuesday it planned to pay shareholders their first dividend in three years, in a further return to normality at the big insurance group after a string of crises.

The announcement came as the company, forced into three capital increases in as many years, said net profits almost tripled to SFr624m ($515m) last year from SFr233m, while premiums rose 8 per cent to break through the SFr20bn barrier.

However, analysts said the strong results, significantly ahead of market expectations, had been driven by big investment gains Many remained cautious about prospects for the group, because of the regulatory constraints in its core Swiss market.

Swiss Life attributed the improvement to continuing cost cuts, achieved in spite of higher premiums, and disciplined pricing.

It also benefited from the continuing simplification of its portfolio, most recently the decision to merge the life activities of its La Suisse subsidiary with the parent company and sell La Suisse's property and casualty lines.

?We have completed the last important step of refocusing our business. We have reached an important milestone …and can view the future with confidence,? said Rolf D?rig, chief executive.

Roger Degen, at LODH, the private bank, said: ?2004 results are largely above consensus but mainly due to the much higher than expected capital gains.? The group said its financial result rose by 14 per cent to SFr6.7bn, boosted by capital gains on fixed-income investments, with SFr965m of overall net realised gains.

Swiss Life said it had ?seized? selected opportunities in the second half of last year presented by historically low interest rates.

The insurance portfolio investment return improved to 6.4 per cent from 4.7 per cent, while the group's equity exposure went up to 5 per cent at the end of the year, compared with just 2.1 per cent in 2003.

Premium growth was driven by strong demand for pensions products in France and Germany, while the group also managed to regain market share in the Swiss market.

Costs, already cut sharply in 2003, were reduced further, with operating costs down 5 per cent, or SFr110m, last year on the basis of job cuts and other savings. Embedded value an indicator of the value of the existing business climbed 15 per cent to SFr7.9bn.

Shares in Swiss Life closed up 2.1 per cent at SFr186.90.

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