Slide 1: Full-year results 2008 Investors' Presentation
Full-year results 2008 Investors’ Presentation Zurich, 24 March 2009
Slide 2: Agenda
Agenda 1. Overview Bruno Pfister 2. Financial results Thomas Müller 3. Outlook Bruno Pfister 2
Slide 3: Key points
Key points z Unsatisfactory result due to severe financial market dislocation – Gross written premiums -4%, mainly due to lower sales to HNWI – Profit heavily influenced by impairments as well as realisations z Solid capitalisation, despite financial crisis – Resilient IFRS equity and stable IFRS so
Slide 4: 2008 results
2008 results Net profit CHF 345 million - 75% Result from operations 1) CHF - 842 million n.a. Shareholder’s equity CHF 6.6 billion - 9% Group solvency 159% - 3 ppts Return on equity 5.0% - 13.1 ppts Embedded value CHF 8.5 billion - 34.1% Dividend (proposed) CHF 5 - CHF 12 1) Continuing operations 4
Slide 5: Business performance 2008
Business performance 2008 z Number 1 market position confirmed z Efficiency increased, costs reduced Switzerland z Annual cost savings of CHF 90 million identified z New generation of innovative products introduced z Strong premium growth continued (+8%) France z IFA distribution channel substantial
Slide 6: Business performance (ctd)
Business performance (ctd) z HNWI also impacted by crisis, leading to dissapointing sales PPLI 1) z New and adapted products launched z Additional points of sale added in Singapore and Dubai z AWD sales of Swiss Life products more than doubled AWD z Restructuring of UK and issues in Austria addresse
Slide 7: Payout ratio
Payout ratio 80 60 Since 2007, aiming for 43% 46% 1) payout ratio of 40-60% of IFRS net profit 40 26% 22% 19% 20 0 2004 2005 2006 2007 2008 CHF 4 CHF 5 CHF 7 CHF 17 CHF 5 1) Payout ratio 2008 excluding treasury shares from share buyback programme 7
Slide 8: Agenda
Agenda 1. Overview Bruno Pfister 2. Financial results Thomas Müller 3. Outlook Bruno Pfister 8
Slide 9: Income statement
Income statement CHF million (IFRS basis) Continuing operations FY 2008 FY 2007 Gross written premiums, fees and deposits received 18 515 21 213 Asset management and other commission income 950 196 Financial result for own risk 388 4 885 Net insurance benefits and claims -12 915 -13 268 Policyholder
Slide 10: Premiums
Premiums GWP & PHD; CHF million (IFRS basis) Switzerland 8 172 -3% 8 413 France 1) 5 763 +4% 5 518 Germany 1 977 -8% 2 158 PPLI 2) 2 395 -23% 3 097 244 Luxembourg 3) +24% 197 18 515 Continuing 4) -4% 19 320 ERISA 1 893 Total 18 515 -13% reported 21 213 FY 2008 FY 2007 1) Without ERISA in 2007 2) Inc
Slide 11: Operating result
Operating result Segment results; CHF million (IFRS basis) FY 2008 FY 2007 Insurance (Continuing) -715 1 047 of which - Switzerland -748 650 - France 40 3241) - Germany 29 65 - Other -36 8 Investment Management 94 93 AWD -41 - Insurance & Banking (Discontinued) 1 694 639 Other & eliminations -55 0 U
Slide 12: Cost development
Cost development CHF million (IFRS basis) Continuing operations FY 2008 FY 2007 Change Total operating expense 3 319 2 489 33.3% Commission and DAC amortisation -966 -936 Restructuring costs -54 -32 AWD -807 ERISA/CapitalLeben -118 IAS 19 -32 -31 Currency effects -22 Operating expense (adjusted) 1 4
Slide 13: Investment result
Investment result CHF million (IFRS basis) – insurance portfolio for own risk; continuing excl. ERISA FY 2008 FY 2007 1) Direct investment income 4 530 4 622 Direct investment income in % 4.1% 4.1% Expense -180 -196 Net capital gains/losses on investments and impairments -4 071 -219 Net investment r
Slide 14: Breakdown of net investment result
Breakdown of net investment result CHF million (IFRS basis) – insurance portfolio for own risk; continuing Direct Impair- Gross Gains/ Net realised Net investment ments gains/losses losses after investment income through P&L on derivatives hedging result (incl. forex) Bonds 1 942 -126 -1 464 1 861 3
Slide 15: Investment result
Investment result CHF million (IFRS basis) – insurance portfolio for own risk; continuing excl. ERISA FY 2008 FY 2007 1) Direct investment income 4 530 4 622 Direct investment income in % 4.1% 4.1% Expense -180 -196 Net capital gains/losses on investments and impairments -4 071 -219 Net investment r
Slide 16: Investment portfolio
Investment portfolio CHF million (fair value basis) insurance portfolio for own risk, continuing excl. ERISA 106 327 112 658 Equities & equity funds 2.2% Alternative investments 3.1% 8.0% Real estate 11.9% 5.3% Mortgages 5.3% 10.9% Loans 12.6% 5.1% 12.9% Bonds 58.6% 54.9% Cash and other 6.3% 2.9% 31
Slide 17: Bond portfolio
Bond portfolio Insurance portfolio (fair value basis) Ratings Below BBB CHF million 9% BBB AAA 106 327 27% 19% AA Others 1) 0.5% A 13% 32% Corporate 28.7% bonds Below BBB A BBB Government 4% 3% 1% and supra- 29.4% AA nationals 9% AAA 83% 1) Exposure to CDO/CLO, ABS, MBS, etc. 17
Slide 18: Reserves and shareholders' equity
Reserves and shareholders’ equity CHF million (IFRS basis) 31.12.2008 31.12.2007 Insurance reserves 113 308 121 829 Insurance liabilities 91 024 94 492 Investment contracts 11 135 12 907 Financial liabilities FVPL (unit-linked) 9 727 11 042 Policyholder participation liabilities 1 422 3 388 Borrowin
Slide 19: Development of shareholders' equity
Development of shareholders' equity CHF million (IFRS basis) 7 277 6 609 364 -549 -547 -286 350 01.01.2008 Change in Change in Reduction Change Profit 31.12.2008 unrealised treasury in par value in FX attributable to gains/losses shares (dividend) translation, shareholders share premium and share ca
Slide 20: Group solvency
Group solvency Based on IFRS equity +78% -37% -15% 194% -3% -25% 1) 162% -34% +33% 159% 31.12.06 31.12.07 Divestments Acquisition Share Dividend Result Change in Reclassi- 31.12.08 BdG, AWD buy-back 2008 continuing revaluation fication NL, BE operation reserve and bonds other effects (before reclass
Slide 21: Embedded value
Embedded value CHF million (statutory basis) 31.12.2008 31.12.2007 Change RoEV Switzerland 2 311 4 847 -52.3% -47.2% International 2 577 4 996 -48.4% -4.1% ANAV Swiss Life Holding 3 569 2 994 Swiss Life Group 8 457 12 837 -34.1% -29.5% of which ANAV 6 088 8 705 PVFP 3 502 4 880 Cost of holding capit
Slide 22: Embedded value – analysis of change
Embedded value – analysis of change CHF million (statutory basis) Swiss Life Group as per 31.12.2007 12 837 Dividend payment 2007 -596 Unwind 2008 +782 Investment return 2008 variance -3 568 Future investment return variance -1 017 150% cost of holding capital -484 Operational & demographic variance
Slide 23: Value of new business
Value of new business CHF million (statutory basis) Switzerland France1) Germany Luxembourg Total cont. operations 118 78 59 38 34 27 21 18 1 -2 APE 263 288 506 263 153 171 52 42 974 7641) New business margin 8.0% 15.4% FY 2008 FY 2007 1) In the new structure of Swiss Life France, the 2007 values fo
Slide 24: AWD
AWD AWD Group, stand-alone FY 1), EUR million (IFRS basis) FY 2008 FY 2007 Change Revenues 633.0 717.5 -11.8% Germany 385.6 384.7 Austria & CEE 114.5 165.4 United Kingdom 63.6 94.2 Switzerland 69.3 70.4 EBIT 19.7 83.0 -76.3% Germany 72.3 75.0 Austria & CEE 4.2 34.7 United Kingdom -24.9 -4.2 Switzerl
Slide 25: Agenda
Agenda 1. Overview Bruno Pfister 2. Financial results Thomas Müller 3. Outlook Bruno Pfister 25
Slide 26: Outlook
Outlook 1 Long-term perspective for life insurance continues to be strong 2 Sound business portfolio with broadened product range 3 Diversified distribution franchise with growth potential 4 Cost savings initiated to support competitive position 5 Largely de-risked investment portfolio and solid cap
Slide 27: Supplementary information
Full-year results 2008 Investors’ Presentation Supplementary information
Slide 28: Supplementary information
Supplementary information 1. Profit and loss 2. AWD 3. Balance sheet 4. Investments 5. Embedded value 6. Contact details and financial calendar 28
Slide 29: Adjusted premium growth
Adjusted premium growth CHF million (IFRS basis) 2008 2007 Change GWP & PHD 19 439 24 170 -20% Less discontinued -924 -2 957 Less ERISA -1 893 Continuing operations excl. ERISA 18 515 19 320 -4% Currency effects -278 GWP & PHD adjusted 18 515 19 042 -3% 29
Slide 30: Switzerland: Life insurance premiums
Switzerland: Life insurance premiums CHF million (IFRS basis) FY 2008 FY 2007 Change Total life GWP incl. PHD 8 172 8 413 -2.9% Single premiums 4 342 4 276 +1.5% Periodic premiums 3 763 4 069 -7.5% Reinsurance premiums assumed 67 68 -1.0% Group life 6 409 6 630 -3.3% Single premiums 3 690 3 636 1.5%
Slide 31: Switzerland: statutory distribution ratio in BVG business
Switzerland: statutory distribution ratio in BVG business CHF million (statutory basis) FY 2005 FY 2006 FY 2007 FY 2008 Gross revenue 2 199 100% 2 086 100% 2 065 100% 505 100% Total insurance benefits paid 2 060 93.7% 1 919 92.0% 1 890 91.5% 1 442 >100% (incl. bonuses) Operating income 139 167 175 -
Slide 32: Switzerland: Performance-oriented products
Switzerland: Performance-oriented products New business gross volume (unit-linked, funds and account solutions); CHF million 215 183 155 133 133 112 87 27 1HY 05 2HY 05 1HY 06 2HY 06 1HY 07 2HY 07 1HY 08 2HY 08 Unit-linked and funds VitalityPlus Vitality Index Calmo Funds GarantiePlus GarantiePlus 9
Slide 33: Supplementary information
Supplementary information 1. Profit and loss 2. AWD 3. Balance sheet 4. Investments 5. Embedded value 6. Contact details and financial calendar 33
Slide 34: AWD advisor development
AWD advisor development 6 305 6 009 398 629 Switzerland 314 333 390 268 UK 1 342 1 260 Austria, CEE 4 251 Germany 1) 4091 Advisors Net departures Acquired Advisors 31.12.2007 (restructuring UK, Proventus 31.12.2008 difficult market environ- ment in Austria, advisors qualification pressure 211 in Ger
Slide 35: AWD revenues
AWD revenues AWD Group revenues (continuing operations), EUR m 715 94 633 64 z UK: collapsed mortgage market z Austria: substantially lower demand 165 114 for equity-based products; 71 69 CEE: continuous double-digit growth z Switzerland: stable revenue development 385 386 z Germany: slight top-line
Slide 36: AWD operational targets up to 2012
AWD operational targets up to 2012 Advisors New customers Customers advised ‘000 ‘000 ~8500 ~300 ~750 6305 6009 207 481 181 429 2007 2008 2012P 2007 2008 2012P 2007 2008 2012P 36
Slide 37: AWD financial targets up to 2012
AWD financial targets up to 2012 Revenues EBIT EUR m EUR m ~1000 ~130 715 633 84 20 1) 2007 2008 2012P 2007 2008 2012P 1) FY 2008 Continued operations excluding losses and restructuring from discontinued operations of AWD UK 37
Slide 38: Reconciliation AWD segment result to AWD EBIT
Reconciliation AWD segment result to AWD EBIT CHF million (IFRS basis), AWD stand-alone AWD segment result FY 2008 -41 + Amortisation customer relationship asset +21 - Financial result AWD 2008 -5 + EBT AWD Q1 2008 +29 + EBT discontinued operations AWD UK +27 EBIT AWD FY 2008 1) +31 1) EBIT AWD FY 2
Slide 39: Supplementary information
Supplementary information 1. Profit and loss 2. AWD 3. Balance sheet 4. Investments 5. Embedded value 6. Contact details and financial calendar 39
Slide 40: Allocation of unrealised gains/losses on bonds
Allocation of unrealised gains/losses on bonds CHF million (IFRS basis) 61 0 -130 8 722 -921 Unrealised Deferred Shadow Deferred Minority Allocated to gains/losses policyholder DAC taxes interest shareholders’ on bonds bonuses adjustment equity 40
Slide 41: Insurance reserves by country
Insurance reserves by country CHF million (IFRS basis) - comparable basis 1) Local currency 64 462 Switzerland -4% -4% 67 256 20 716 Luxembourg Liechtenstein France -12% -3% 2% 6% 23 657 Germany 17% 19 098 0% Germany -10% 21 243 Luxem- 2 380 +2% +13% bourg 2 343 France 18% Liechten- 6 719 Switzerlan
Slide 42: 11% of Swiss Life Group reserves subject to BVG minimum interest rates
11% of Swiss Life Group reserves subject to BVG minimum interest rates Breakdown of insurance reserves (incl. unit-linked) as per 31.12.2008; CHF billion (IFRS basis) Non-life (1 billion) Investment contracts & PH deposits 26 Europe 25 Continuing operations Traditional 113 business 86 Individual Gua
Slide 43: Average technical interest rate of 2.66%
Average technical interest rate of 2.66% CHF / EUR / USD / GBP million (statutory basis) CHF EUR USD GBP Total reserves 62 591 22 455 97 8 Average technical interest rate 2.51% 1) 2.94% 4.15% 3.62% Overall: 2.66% 1) Already taking into account the guaranteed interest rate for mandatory group life bu
Slide 44: Development of average technical interest rate
Development of average technical interest rate -9 bps sale of ERISA, NL, BE -4 bps development of business +3 bps change guaranteed -8 bps development rate of CH group life of business -16 bps change guaranteed 3.14% rate of CH group life 3.03% 3.00% 2.90% 2.66% 01.01.05 01.01.06 01.01.07 01.01.08 0
Slide 45: Duration gap
Duration gap Total weighted duration gap 1) in % 3.1 1.1 0.9 0.7 0.7 31 Dec 2006 30 June 2007 31 Dec 2007 30 June 2008 2) 31 Dec 2008 1) Explains the relative change in economic net worth due to a parallel shift of the underlying interest rate curve 2) Restatement due to bi-annual full liability pro
Slide 46: Capitalisation models, methods and scope
Capitalisation models, methods and scope Required Available capital capital Shareholders’ equity Additional elements includes: included 1): Solvency I Factor Shareholder part of + Minority interest Swiss Life Group Based 2) revaluation - DAC non-life (IFRS) reserves Solvency I Factor No revaluation
Slide 47: Group solvency
Group solvency CHF million (IFRS basis) 2008 2007 Available solvency margin IFRS equity (incl. minority interests) 6 652 7 334 Eligible part of hybrid capital 1) 2 323 2 770 Goodwill and other intangible assets -2 205 -934 DAC non-life -55 -54 Dividends and nominal value reduction -152 -558 Unattrib
Slide 48: Statutory solvency
Statutory solvency CHF million (statutory basis) Available solvency margin Statutory solvency Parent company statutory equity 1 727 Intangibles -5 6 106 176% Hybrid capital 1) 1 738 Fund for future appropriation 168 Additional Zillmerisation 476 3 476 Unrealised capital gains 1 516 Unattributed surp
Slide 49: Supplementary information
Supplementary information 1. Profit and loss 2. AWD 3. Balance sheet 4. Investments 5. Embedded value 6. Contact details and financial calendar 49
Slide 50: Bond portfolio: Ratings and classification
Bond portfolio: Ratings and classification Insurance portfolio (fair value basis) Breakdown by rating Below BBB BBB 5% 10% CHF million 106 327 A AAA 18% 56% AA 11% Breakdown by classification Others Bonds 58.6% 1% Government and Supranationals 50% Corporate bonds 49% 50
Slide 51: Government and supranational bond portfolio: Ratings and currency
Government and supranational bond portfolio: Ratings and currency Insurance portfolio (fair value basis) Breakdown by rating A BBB Below BBB 4% 3% 1% CHF million AA 9% 106 327 AAA 83% Breakdown by currency USD 2% Government and supra- 29.4% nationals CHF 41% EUR 57% 51
Slide 52: Corporate bond portfolio: Ratings and currency
Corporate bond portfolio: Ratings and currency Insurance portfolio (fair value basis) Breakdown by rating Below BBB 9% CHF million BBB AAA 19% 27% 106 327 AA A 13% Corporate 32% bonds 28.7% Breakdown by currency USD 20% EUR CHF 60% 20% 52
Slide 53: Corporate bond portfolio: Characteristics
Corporate bond portfolio: Characteristics 31 December 2008 Loans (Duration: 5.8) Available for sale (Duration: 5.6) IFRS Book Value: CHF 16 251 million IFRS Book Value: CHF 15 567 million Fair Value: CHF 13 981 million Fair Value: CHF 15 567 million of which Tier 1-Bank Bonds: CHF 732 million (5.2%)
Slide 54: Exposure to CDO/CLO, ABS, MBS, etc.
Exposure to CDO/CLO, ABS, MBS, etc. Insurance portfolio (fair value basis), CHF million, as of 31.12.2008 Fair Ratings Year of maturity, percent value Below BBB 2010– After Category CHF m AAA AA A BBB or unrated 2009 2012 2012 CDO/CLO 1) 140 79% 0% 0% 0% 21% 67% 20% 13% • With ABS collateral 34 48%
Slide 55: Loan and mortgage portfolio
Loan and mortgage portfolio Insurance portfolio (fair value basis) Breakdown by country France 1% CHF million 106 327 Switzerland Germany 61% Mortgages 38% 5.3% 17.9% Loans 12.6% Breakdown by type Other loans Mortgages 7% 30% Purchased Policyholder loans loans 3% 60% 55
Slide 56: Real estate portfolio
Real estate portfolio Insurance portfolio (fair value basis) Breakdown by country Germany 6% France 10% CHF million 106 327 Real 11.9% Switzerland estate 84% Breakdown by type Others 1% Centres 9% Mixed 26% Residential 43% Commercial 21% 56
Slide 57: Equity portfolio (gross)
Equity portfolio (gross) Insurance portfolio (fair value basis) CHF million 106 327 Breakdown by country Equities 2.2% Luxembourg & equity 1% Switzerland 18% funds Germany 53% France 28% 57
Slide 58: Alternative investment portfolio (gross)
Alternative investment portfolio (gross) Insurance portfolio (fair value basis) Hedge funds: CHF 3.0 billion Commodities related Others 6% strategies 7% Tactical trading CHF million 17% 106 327 Equity hedged Alternative 16% 3.1% investments Relative value Event driven 30% 24% Private equity: CHF 234
Slide 59: Hedge funds movements
Hedge funds movements CHF million (IFRS basis) 486 -1 229 5 915 -1 295 -304 -574 2 999 01.01.08 Purchases Cash Impairments Realised/ FX gains 31.12.08 reductions unrealised & losses gains/losses 59
Slide 60: Currency exposure
Currency exposure Insurance portfolio (fair value basis) Net 0.8% of insurance portfolio JPY 2% USD 33% EUR 58% GBP 7% Gross currency exposure CHF 29 193 million Hedged currency exposure CHF 28 344 million Net currency exposure CHF 849 million 60
Slide 61: Forex and interest rates
Forex and interest rates Foreign currency exchange rates 31.12.08 30.06.08 31.12.07 1.1.-31.12.08 1.1.-31.12.07 EUR 1.4915 1.6054 1.6552 1.5874 1.6432 GBP 1.5413 2.0265 2.2561 2.0006 2.4016 USD 1.0608 1.0156 1.1249 1.0831 1.2004 Interest rates 1) 31.12.08 30.06.08 31.12.07 CHF 2.095 3.288 3.048 EUR
Slide 62: Supplementary information
Supplementary information 1. Profit and loss 2. AWD 3. Balance sheet 4. Investments 5. Embedded value 6. Contact details and financial calendar 62
Slide 63: Implementation of embedded value at Swiss Life
Implementation of embedded value at Swiss Life z ANAV and PVFP have been calculated for more than 90% . Swiss Life LU of the mathematical reserves z For other life insurance entities Swiss Life DE only the statutory book value Swiss Life has been included FR Swiss Life CH z All other entities have a
Slide 64: Value of new business in Switzerland
Value of new business in Switzerland APE, CHF m VnB, CHF m VNB margin, percent 36 176 178 20.2 159 147 29 17.0 16.5 17.0 27 25 Group life 2005 06 07 08 2005 06 07 08 2005 06 07 08 125 123 111 116 20.7 23 12 9.8 Individual -4 -3.5 life -29 -23.2 2005 06 07 08 2005 06 07 08 2005 06 07 08 64
Slide 65: Key assumptions for embedded value calculation
Key assumptions for embedded value calculation 31.12.2008 31.12.2007 z Weighted new money return based on asset CH EU CH EU allocation Risk discount rate 7.0% 8.0% 7.0% 8.0% z Weighted returns are higher due to increase Equity return 6.5% 7.5% 6.5% 7.5% in assumed future investment returns z Long-te
Slide 66: Asset allocation assumptions by region
Asset allocation assumptions by region 31.12.2008 31.12.2007 CH EU CH EU Cash and cash equivalents 2% 4% 2% 1% Bonds and loans 75% 81% 62% 75% Mortgages 6% 3% 7% 4% Real estate 17% 7% 13% 7% Equities 0% 3% 8% 9% Participations 0% 0% 0% 0% Alternative investments 0% 2% 8% 4% 66
Slide 67: Sensitivities of embedded value
Sensitivities of embedded value CHF million (statutory basis) Switzerland International Total EmbV FY 2008 (base case) 2 311 2 577 8 457 1) Δ Bond returns +100 bps +41 +207 +248 Δ Bond returns -100 bps -216 -197 -413 Δ Property & equity returns -100 bps -267 -67 -334 Δ Investment returns +100 bps +4
Slide 68: Sensitivities of value of new business
Sensitivities of value of new business CHF million (statutory basis) Total VnB FY 2008 (base case) 78 Δ Bond return +100 bps +29 Δ Investment returns +100 bps +49 Δ Risk discount rate -100 bps +34 Δ Administration costs -10 % +22 Δ Acquisition costs -10 % +24 Δ Cost of holding capital at 100% 1) +38
Slide 69: IFRS equity to embedded value bridge
IFRS equity to embedded value bridge CHF million 3 502 -1 133 1 705 -2 226 8 457 6 609 IFRS Difference in Goodwill & PVFP Cost of Embedded shareholders’ tangible/net other holding value equity assets intangible capital assets 1) 1) Including goodwill CHF 1 727 million, customer relationship asset CH
Slide 70: Cautionary statement
Cautionary statement Although all reasonable effort has been made to ensure that the facts stated herein are accurate and that the opinions contained herein are fair and reasonable, this document is selective in nature and is intended to provide an introduction to, and overview of, the business of S
Slide 71: Supplementary information
Supplementary information 1. Profit and loss 2. AWD 3. Balance sheet 4. Investments 5. Embedded value 6. Contact details and financial calendar 71
Slide 72: Contact details and financial calendar
Contact details and financial calendar Contact Marcus Händel Tel. +41 (43) 284 67 67 Head of Investor Relations E-mail: marcus.haendel@swisslife.ch Rolf Winter Tel. +41 (43) 284 49 19 Senior Investor Relations Manager E-mail: rolf.winter@swisslife.ch Financial calendar Interim statement Q1 5 May 200
Slide 73: SwissLife
be SwissLife Prepared for the future.