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Rigorous cost reduction program

31.01.2002

Swiss Life will due to difficult market conditions report a net profit for 2001 which will be notably below market expectations. Following a proposal from the Corporate Executive Board, the Board of Directors decided on January 28, 2002 to implement a rigorous cost reduction program. This will result in cost savings of 20%. Swiss Life will already achieve substantial savings during the course of 2002. Different measures also in regard to the Swiss group life business (BVG) will be considered. Swiss Life is confident that based on these initiatives it will be again in a position to achieve sustainable profits. The Board of Directors will most likely propose a dividend renouncement for 2001.

Two factors have contributed to the unsatisfactory results. The dramatic fall in equity markets as well as low interest rates. Therefore the guaranteed interest rate of 4% for Swiss group life business is unrealistic in this current low interest rate environment. Swiss Life, which is the market leader in the Swiss group life business, has been hit particularly hard by this regulatory requirement.

More details will be released at the press conference on April 11, 2002.
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