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Shareholders’ Letter

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Ladies and gentlemen,

2016 was yet another excellent year for Swiss Life. Lasting success is never assured, the fine results of recent years were achieved in a challenging political, social and economic environment. We are implementing our plans, which allows us to achieve significant progress in operations and make up for the rock-bottom interest rates.

A few key figures will make this clear: Swiss Life again increased its net profit, by 5% this time, to CHF 926 million. The increase in earnings power came in spite of an 8% decline in premium income, to CHF 17.4 billion – justifying our decision to focus on profitable growth. At the same time, we are seeing the fruits of our perseverance in expanding our fee business: the result in 2016 was a contribution to operating profit of CHF 396 million – an increase year on year of 14 percent. Another strategic reorientation in recent years has likewise fortified our company: our skill in the investment business. As of 31 December 2016, we had a total of CHF 204 billion assets under management, while in third- party customer business we achieved net new assets of CHF 8.5 billion. The company thus had CHF 49.6 billion in assets under management from third parties at the end of 2016, which represents a rise of 28 percent.

In an age of breathtaking innovation and quantum leaps in technology – we believe that people will remain at the heart of our life insurance business.

Our progress demonstrates the persistence with which we are implementing our plans as part of the “Swiss Life 2018” strategy, and we thank our employees most sincerely for their commitment, which enables Swiss Life’s continuing development.

That development will centre on three topics in years to come. First there is “regulation”, or to be more precise the solvency regime known as the Swiss Solvency Test (SST). Capital requirements in Switzerland are roughly two times higher than solvency provisions in Europe, according to a study by the University of St. Gallen. The excessive capital requirements harm SMEs that depend on our services, policyholders and the entire insurance industry, both as an employer and as a pillar of the Swiss economy and financial centre. We are headed in the wrong direction here, and we are disadvantaging customers, shareholders and working Switzerland in equal measures.

The second topic, relevant to virtually all areas of society, is the fact that we are living ever longer. As more people live to see 80, 90 or even 100, our entire social and economic system is being fundamentally altered. The social consequences of this demographic trend are still being massively underestimated in many areas of life. A longer life calls for greater responsibility, not least as regards coming generations. We in Switzerland must be able to reform our pension system so as to avoid placing undue strain on our children and grandchildren. Fairness demands it.

The third topic is the influence of new technologies. Humans, machines and algorithms will join forces to create a future in which new skills are in demand. Routine work, repetitive and dangerous activities will be increasingly taken over by robots and machines in the near future. Thus we will be challenged to integrate the interplay of innovation and continuity, as well as the new customer requirements arising from the digital world, into our everyday work. We will do this with circumspection and in a way that allows us to lead Swiss Life into a successful future – in gratitude for the company of our customers, investors and employees along the way.

We too are called upon to integrate the interplay of human and machine, as well as the new customer requirements arising from the digital world, into our everyday work.

Ladies and gentlemen, in an age of breath-taking innovation and quantum leaps in technology – we believe that people will remain at the heart of our life insurance business, whether that applies to working with customers, training our staff or in our drive to keep impressing our shareholders with our performance.

The successful 2016 financial year enables us to propose a dividend increase from CHF 8.50 to CHF 11.00 to the Annual General Meeting of Shareholders on 25 April 2017.

Thank you for the confidence you have placed in Swiss Life.

Unterschrift Rolf Döring
Rolf Dörig
Chairman of the Board of Directors
Unterschrift Patrick Frost

Patrick Frost
CEO

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