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Shareholders’ Letter

What we achieved as a group in 2018 makes us proud.

Ladies and gentlemen,

A wide range of issues moved people in 2018 – especially in Europe, our main area of activity at Swiss Life. The EU’s quest for identity, sustainability matters in conjunction with climate change, the migration issue, discussions of political direction in the French and German markets, so critical for us, as well as the rapid pace of change in the working world due to digitalisation: all of these topics shaped the public debate.

In Switzerland, meanwhile, the main subject of discussion was the viability of our pension systems. The reason is obvious: people are living ever longer, and the systems are failing to keep pace. The brunt is borne by the younger generations, who must pay for the flaws. The politicians are still far from being able to present us with sustainable solutions for our pension system. Solutions palatable to the majority of the population.

Disproportionate regulation means an unnecessary threat to the pension assets of many SME employees.

Whatever the economic or socio-political climate, however – our chief duty at Swiss Life is sustainable success. For our customers, for our employees and for our investors. At Swiss Life we offer security and solutions that last for decades, even in turbulent times. And we’ve been doing it for over 160 years.

Economic success ensures us our role in society. What we achieved as a group in 2018 makes us proud. Two key figures provide resounding proof of that: for one there is net profit, which we were able to increase year on year by 7% to CHF 1080 million. Then there is the development of our fee business: the 2014 fee result of CHF 269 million had grown to CHF 488 million by the end of 2018 – an increase of over 80%.

Swiss Life is in excellent shape. We have achieved all of the objectives we set ourselves in our last Group-wide programme, “Swiss Life 2018”; indeed, in many cases we even exceeded them. This means that, since 2009, we have managed to successfully complete three Group-wide programmes in a row. Our financial strength has been growing every year. We have also flourished in an area in which we have been able to leverage one of our core competencies: witness the excellent work we have been doing with long-term investments. Despite persistently low interest rates, we have managed to generate returns for our customers the equal of any benchmark. Our growth in third-party investment management also testifies to our strong performance, as we have doubled assets in this business area since 2014, from CHF 33.7 billion to CHF 71.2 billion.

Solidity and continuity become more important in times of major value fluctuation.

Our successes have allowed the Board of Directors to propose a dividend of CHF 16.50 per share for the 2018 financial year at the Annual General Meeting – a dividend payout ratio more than double that of 2014.

Success can never be taken for granted and depends to a degree on the general operating conditions. Last year, as the capital requirements for full insurance were considered excessive by its globally active parent company, another competitor withdrew from the full insurance business in Switzerland. It was a wake-up call for the Swiss insurance sector.

At Swiss Life we continue to offer full insurance solutions and to strongly support our time-tested three-pillar system, and are accordingly opposed to a Swiss Solvency Test for life insurance companies, which not only disadvantages us in the provision of pension solutions on the international market but also gives our customers less choice. Disproportionate regulation means an unnecessary threat to the pension assets of many SME employees. Any other second pillar solution makes employees and employers bear the investment risk, which is why the offer of guarantees, that only life insurance companies provide in the second pillar, is of such fundamental importance to our country’s small and micro enterprises most of all.

Solidity and continuity become more important in times of great change. At Swiss Life we live by that maxim: our ambitious plans for the coming three years depend on our confidence in the extreme robustness of our business model. Our capacity for implementation, financial strength and outstanding employees provide the ideal basis for us to write yet another successful chapter in the Swiss Life story.

We thank you kindly, dear shareholders, for your confidence and support, and look forward to continuing to enjoy your company and interest in years to come.

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

Patrick Frost
CEO