The Swiss Life Group again achieved a good half-year result in the first half of 2006. It increased net profit by 13% to CHF 523 million compared to the same period last year and achieved an annualised return on equity of 14.3%. The improvement in operating performance is also reflected in the profit from operations, which advanced by 22% to CHF 660 million. The gross written premiums of CHF 12.7 billion represent a growth of 9%. Operating expenses went down 4% to CHF 1.5 billion. Although interest rates moved significantly higher in the period under review, shareholders' equity receded by only 6% to CHF 7.2 billion. The Group's embedded value climbed by 13% to CHF 10.1 billion, thanks to the good course of business and the better market environment; this corresponds to a value per share of CHF 298.

In the words of CEO Rolf Dörig: "The implementation of our strategy is proceeding according to plan. The good result proves the further progress the Swiss Life Group has made. Our measures to strengthen distribution efficiency and increase profitability are paying off."

Continuous improvement in results
The Swiss Life Group improved its net profit in the first half of 2006 to CHF 523 million, an increase of 13% compared to the prior-year period. After allowing CHF 12 million for minority interest, a 14% higher profit of CHF 511 million is attributable to the shareholders of Swiss Life Holding. This translates into (diluted) earnings per share of CHF 14.72 (+14%) and an annualised return on equity of 14.3% (prior-year period: 13.4%).

As in the previous year, a special tax situation had a positive impact on the result. No longer required tax provisions of CHF 124 million were written back in the period under review. However, the total tax expense was up by CHF 78 million over the corresponding period of the previous year. The result also includes a gain of CHF 50 million from the sale of Banca del Gottardo (Monaco) and Dreieck Industrie Leasing Ltd. Restructuring costs in Germany and Belgium and one-off expenses relating to the strategic realignment of Banca del Gottardo had an adverse impact amounting to CHF 56 million. Profit from operations improved by 22% to CHF 660 million. The insurance business made the biggest contribution, with a result of CHF 573 million (+24%). Banking contributed another CHF 98 million (+29%). In Investment Management, Swiss Life generated a segment result of CHF 17 million (-23%).

Strong premium growth of 20% in international markets
Gross premium income including deposits under investment contracts amounted to CHF 12.7 billion. This represents an increase of 9% compared to the same period last year, or 7% when one-off effects and exchange rate influences are excluded. Gross premium income in the international markets advanced 20% to CHF 7.2 billion; the organic growth came in at 15%. International business accounted for 57% of total first-half premium volume. In Switzerland, Swiss Life increased its gross premium income in the life business by 3% to CHF 5.5 billion. Due to the disposal of the non-life business, Swiss Life's reported premium income was down 2% in Switzerland. The Swiss Life Group's total income rose 3% from the figure for the first six months of 2005, to stand at CHF 12.2 billion. The increase was largely driven by the 3% growth in net earned premiums to CHF 8.6 billion. It was also fuelled by a 7% rise in policy fees to CHF 217 million and a 15% rise in commissions from banking and asset management activities to CHF 246 million.

Direct return on investments stable at 1.9% (not annualised)

The financial result of CHF 3.0 billion on investments held at own risk was up 2% from the first half of last year. The direct return on insurance portfolio investments amounted to 1.9% (not annualised). Due to the strong rise in interest rates in the first half and the loss in value of the bond portfolio which this entailed, the total investment performance came to -1.0%. Swiss Life shortened the duration of its bond portfolio in the period under review from 7.8 to 5.7 years. The negative impact of the rise in interest rates was reduced by the partial hedging of the bond holdings. The equity exposure of 6.2% at the end of March was lowered once again in April and stood at 2.8% at the end of June.

Operating expenses reduced another 4%
Insurance benefits kept pace with the increase in premium volumes with a rise of 3%, to CHF 8.8 billion. Operating expenses were reduced by 4% to CHF 1474 million. Swiss Life reduced the adjusted operating expenses in its Swiss business by 7% from the corresponding prior-year period. Expressed as full-time equivalents, the Swiss Life Group's workforce numbered 8817 on 30 June 2006. This corresponds to a reduction of 162 full-time positions since the end of 2005, primarily due to the disposal of Banca del Gottardo (Monaco) and Dreieck Industrie Leasing Ltd.

Shareholders' equity at a solid CHF 7.2 billion
The balance sheet performed as expected against the background of a clear uptrend in the interest level and the associated reduction in revaluation reserves for bond holdings. Shareholders’ equity receded by only 6% to CHF 7.2 billion in the first six months of 2006. Core capital for capital adequacy purposes went down by CHF 3.4 billion from the end-of-year figure to CHF 13.2 billion, with reserves for deferred policyholder bonuses making up CHF 2.2 billion of this decline in connection with the upturn in interest rates. The solvency margin of the Swiss Life Group came to 155% as per 30 June 2006 (end of 2005: 211%) and remains at a comfortable level.

Embedded value up 13% to more than CHF 10 billion

The Swiss Life Group's embedded value rose by 13% to CHF 10.1 billion in the first half of the year, which corresponds to a value per share of CHF 298 as of 30 June 2006. This substantial increase is a result of the improved operating performance, the growth and the better market environment. The statutory investment return was clearly above expectations for the first half of 2006 and, in view of recent interest rate developments, the projected return on bond investments has been revised upward. The value of new business contributed CHF 78 million to the increase in embedded value.

Transmission of today's events and further documentation
Today's events will be transmitted at 9.00 a.m. (presentation for analysts and investors in English) and 11.15 a.m. (presentation for media in German) at All additional documentation concerning the half-year results can likewise be found there.


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Swiss Life

The Swiss Life Group is one of Europe’s leading providers of pension and life insurance products. The Swiss Life Group offers individuals and companies comprehensive advice across a broad range of products via agents, brokers and banks in its domestic market, Switzerland, where it is market leader, and selected European markets. Multinational companies are serviced with tailor-made solutions by a network of partners in over 60 countries and regions. With Banca del Gottardo, the Swiss Life Group is also a provider of banking services. The bank, with its head office in Lugano, has an extended national and international network and around CHF 34 billion in customer assets under management.

Swiss Life Holding, registered in Zurich, dates back to the Schweizerische Rentenanstalt founded in 1857. Shares of Swiss Life Holding are listed on the SWX Swiss Exchange (SLHN). The Swiss Life Group employs a staff of around 9000.

Cautionary statement regarding forward-looking information

This publication contains specific forward-looking statements, e.g. statements including terms like “believe”, “assume”, “expect” or similar expressions. Such forward-looking statements are subject to known and unknown risks, uncertainties and other factors which may result in a substantial divergence between the actual results, financial situation, development or performance of the company and those explicitly or implicitly presumed in these statements. Against the background of these uncertainties readers should not place undue reliance on forward-looking statements. The company assumes no responsibility to update forward-looking statements or to adapt them to future events or developments.