The Swiss Life Group again achieved a very strong result in the first half of 2007. It increased net profit by 21% on the prior-year figure to CHF 635 million. This performance was bolstered by the focus on profitable growth, further efficiency improvements, a favourable risk experience and a good financial result. The gross written premiums of CHF 14.0 billion represent a growth rate of 10%. Embedded value rose by 17% to CHF 12.5 billion. Swiss Life is not affected by the crisis on the US subprime mortgage market. The relevant exposure represents a mere 0.1% of investments.

In the first half of 2007, the Swiss Life Group generated a net profit of CHF 635 million, which corresponds to a rise of 21% on the same period last year. After allowing CHF 20 million for minority interest, a net profit of CHF 615 million was allocatable to the shareholders of Swiss Life Holding. This translates into (diluted) earnings per share of CHF 17.72 for the first half of the year and an annualised return on equity of 17.3% (2006 HY: 14.3%).

The Group's value in terms of embedded value grew by 17% in the period under review to CHF 12.5 billion. The value of new business climbed 6%, contributing CHF 83 million to the increase.

Swiss Life’s profit from operations went up 34% on the same period last year to CHF 884 million. The Insurance segment made the biggest contribution, with a result of CHF 706 million (+23%). Approximately half of this amount was generated in Switzerland (CHF 350 million) and the other half (CHF 356 million) abroad.

The result of the Banking segment came to CHF 164 million and the Investment Management segment realised a result of CHF 35 million.

In the words of Rolf Dörig, Group CEO: “We have consistently improved our results in recent years and strengthened our market position. We expect to achieve the profit target set for 2008 of CHF 1 billion already in 2007, barring any unforeseen events. Consequently, we will communicate new strategic and financial targets in December 2007.”

Strong premium growth in Switzerland
Swiss Life continued to experience above-average growth. Gross premiums, policy fees and deposits received under insurance and investment contracts climbed 10% (7% in local currency) to CHF 14.0 billion. In Switzerland, Swiss Life raised its premium income by 10% to CHF 6.0 billion, clearly outperforming market growth rate. This increase stemmed from group business, where Swiss Life grew its premium income by 12% to CHF 5.1 billion. In international markets, premium income came to CHF 8.0 billion and the growth rate was 10% (6% in local currency).

Policy fees received under insurance and investment contracts went up 37% to CHF 298 million. The fee income from asset management and banking rose by 6% on the prior-year period to CHF 260 million.

Financial result grew by 43% to CHF 4.2 billion
The financial result for investments held at own risk increased by 43% to CHF 4.2 billion. With regard to direct income, Swiss Life benefited from rising interest rates and higher dividends and hedge fund distributions. The direct return on insurance portfolio investments in the first half of 2007 amounted to 2.1% (not annualised). Taking into account net capital gains and impairments as well as expenses for asset management, the net investment return came to 2.4%. The total investment return of 0.0%, which also includes the changes in unrealised gains and losses directly reflected in equity, was adversely affected by the sharp rise in interest rates in the period under review.

Swiss Life slightly adjusted its strategic asset allocation as part of asset and liability management. The portfolio has been more broadly diversified, without any increase in the overall risk. In addition, Swiss Life anticipated the rise in interest rates and shortened the duration of the bond portfolio early on. Mid-year, when the rates reached their highest levels so far this year, the duration was lengthened and the economic risk associated with interest rate changes was reduced. At the same time, Swiss Life is taking advantage of the wider credit spread to increase credit risks.

Swiss Life is not affected by the crisis on the US mortgage market. The exposure to US subprime mortgages totalled CHF 140 million, which represents 0.1% of the Group’s investments.

Allocation to reserves for policyholder bonuses doubled to CHF 1.7 billion
Insurance benefits rose 9% to CHF 9.6 billion, reflecting the course of business. The amount allocated to the reserves for policyholder bonuses was doubled to CHF 1.7 billion, meaning that policyholders get to share in the good financial result.

There was a 2% increase overall in operating costs. In Switzerland, they fell by a further 6% due to the ongoing measures to boost efficiency. In international markets, the costs developed in line with growth. On the whole, the operating expense came to CHF 1.7 billion, which represents a 15% increase on the prior-year figure. This rise primarily stems from the considerable increase in amortisation expense for deferred acquisition costs, the rise in commission payments due to growth, and currency effects as a result of the stronger euro.

Sound capital base

Shareholders' equity for Swiss Life Holding fell by 5% to CHF 7.2 billion in the period under review, mainly because of the hike in interest rates and the resultant reduction in the revaluation reserves for the bond portfolio. For the same reasons, the core capital declined by 15% to CHF 12.6 billion. The impact of rising interest rates was softened to some extent by the hybrid debt transaction in the first half of 2007. The Swiss Life Group has a sound capital base. The solvency ratio, calculated in accordance with the Federal Office of Private Insurance's new method, came to 175% on the key date.

As at 30 June 2007, the Swiss Life Group employed a workforce of 8673 (8693 as at 31 December 2006). The assets under control held by Swiss Life amounted to CHF 205.6 billion.

Transmission of today's events and further documentation

Today's events will be transmitted at 09:00 (presentation for analysts and investors in English) and 11:15 (presentation for the media in German) on All additional documentation on the half-year results can also be found there.

Info Kit

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 private banking services. The bank, with its head office in Lugano, has an extended national and international network and around CHF 36 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.