Swiss Life Holding AG

Ladies and gentlemen, welcome to the Swiss Life presentation of the Half Year Results 2025 conference call and live webcast. I am Moira, the course call operator. I would like to remind you that all participants will be in listen-only mode and the conference has been recorded. The presentation will be followed by a Q&A session. You can register for questions at any time by pressing star and 1 on your telephone. Webcast viewers may submit their questions or comments in writing via the relative field. Kindly note that webcast questions will be answered after the call. For operator assistance, please press star and zero. The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Mr. Matthias Hellig, Group CEO of Swiss Life. Please go ahead, sir.

Dear analysts and investors, good morning. Thank you for joining us and welcome to our conference call. Today, we report our results for the half-year 2025. I will provide you with a brief overview before handing over to our CFO, Marco Geruzzi, for more details. Swiss Life delivered a pleasing operational performance in the first six months of the year. We grew the insurance business, meeting premiums, operating results, and the contractual service margin. We also grew the fee business and achieved strong net new assets in our third-party asset management. In a nutshell, I am pleased with the business activity and the progress we have achieved. Altogether, we report growth in profit from operations and a strong solvency level. Our results show the great commitment of our employees and advisors. I would like to thank all of them for their strong engagement vis-à-vis our customers. Let me provide some more color on the financial results. Profit from operations increased by 3% in local currency to $903 million. This is due to the operating result insurance business, which grew by 6%. The result was stable at $392 million, despite the lower contribution from asset managers, in line with the lower share of non-recurring income, as expected. Net profit declined by 5% to $602 million, as we include higher tax expenses. For example, in France, where the government increased the corporate tax rate for 2025. The return on equity was at 17.6%, and thus marginally below the prior year level. Cash remittance decreased by 8% to $1.17 billion. As flagged, the 2024 figure included one-offs of about $0.14 billion. Adjusted for those, cash remittance growth amounts to 4%. The SST is around 205% and continues to be above the ambition range of 140 to 190%. Moreover, the ongoing 750 million share by bank is proceeding as planned and will run until the end of May 2026. Those results mark a successful start to the Swiss Life 2027 program that we announced last December. Swiss Life 2027 takes us a step higher on our success path as we strive to reach new heights for earnings and cash returns to shareholders. You can see our strategic actions and our financial targets on this slide. We are on track. Marco will take you in more detail through the Swiss Life 2027 progress reporting, and before that, through the half-year financial results.

Thank you, Matthias. Good morning, ladies and gentlemen. Let me continue today's presentation by taking a closer look at our pleasing 2025 half-year results. We begin with some selected P&L figures shown on slide six. Insurance revenue was down to 4.5 billion IRPAA revenues from France and international were fully offset by negative ethics effects and the lower CSM release. Insurance service expenses were flat at 3.8 billion. The net investment result decreased to 254 million. As a reminder, this is an IFRS 17 accounting figure, which also includes VFA experience adjustments and other effects. with offsetting gains not reported in this position. In view of our investment performance, we continue to focus on the net investment income, which we will discuss later. Profit from operations increased by 3% in local currency to 903 million, driven by the operating result from insurance business. Borrowing costs increased to 82 million. This is primarily due to the early refinancing of maturing bonds, leading to double-carry expenses in the first half of the year. In June 2025, we repaid bonds worth about 1 billion. Income tax expense was up to 220 million. Slightly more than one-third of this increase is due to an extraordinary higher corporate tax rate for 2025 implemented by the French government. The remainder stems from a German-specific tax effect on real estate funds, as well as from structural optimizations and other effects. Net profit was at 602 million. This is a decrease of 5% or, adjusted for ethics translation, of 4%. Turning now to further selected figures. Gross written premiums, fees, and deposits received increased by 5% in local currency to $12.1 billion. driven by positive developments in all our insurance business divisions. Fee and commission income was up by 2% in local currency to 1.3 billion. All sources contributed to this growth. Our asset managers owned IFAs as well as own and third-party products and services. The net investment income of the insurance portfolio for own risk was at 1.6 billion. Operating expenses were at 1 billion. I will now move on to our segment reporting, starting with Switzerland. Premiums increased by 4% to 6.3 billion. The life insurance market was flat. Premiums in group life increased by 4%, while the market was down by 1%. Periodic premiums declined by 2%. Single premiums grew by 12%, primarily driven by higher premiums from existing clients and new business. Assets under management in our semi-autonomous foundations increased to 8 billion, up from 7.8 billion at year-end 2024. Premiums in individual life are stable. The market increased by 3%. Periodic premiums increased by 1%. Single premiums decreased by 2% compared to a very strong prior year levels. Fee and commission income was up by 5% to $176 million, mainly due to higher income from unit-linked business and from investment solutions for private clients. The segment result increased by 4% to $458 million due to a higher operating result from insurance business. Income from assets not backing insurance liabilities grew, driven by real estate. The fee result increased by 3% to $27 million. Higher income was largely offset by continuous investments in growth initiatives, such as investment solutions for private clients, which we mentioned in previous disclosures. Cash remittance decreased by 13% to $609 million. As a reminder, the figure for the first half of 2024 included positive one-offs of $0.12 billion pertaining to the non-remitted part of the 2022 local statutory profits and to an extraordinary tax provision release. Turning now to France. Please note that all figures quoted are in euros for our French, German, and international segments. In France, premiums increased by 7% to 4 billion, while the total market was up by 6%. In our life business, premiums grew by 9%, the market was up by 5%. The unit link share in our live premiums was essentially stable at a high level of 65%. This compares to a market average of 38%. We generated live net inflows of 1.3 billion. Total market net inflows were at 26.6 billion. Health and protection premiums grew by 2%, driven by price increases. The market was up by 4%. P&C premiums were down by 3%. Fee and commission income was stable at 295 million. Unit-linked fee income grew based on higher average unit-linked reserves. This was fully offset by lower income from structured products, which was very high in prior years. The second result grew by 9% to 209 million. The fee result was up by 4% to 106 million due to the live unit-linked businesses. The contribution from structured products declined due to the lower income and as flagged during the 2024 full-year call due to a shift of brokerage fees from structured products to the distributing entity, which is our insurance business. This will continue to apply. The operating result from insurance business was up by 14% to 103 million due to a higher contribution from the P&C business. Cash remittance increased by 2% to 182 million due to the statutory contribution. Let me briefly address two relevant aspects of the political environment in France. As mentioned, for 2025, the French government extraordinarily increased the corporate tax rate by 10 percentage points. In addition, there is headwind from a social security health reform, which is likely to impact our health and protection business in the second half of 2025. While the French government has not yet finalized the outcome, we remain focused on proactively navigating the environment. Moving on to Germany. Premiums are up by 3% to 758 million, driven by modern, modern traditional and disability products. The market was up by 11% due to higher single premiums. Fee and commission income increased by 6% to $422 million, driven by both higher productivity at owned IFAs with an essentially stable number of financial advisors and by a higher contribution from the insurance business. As a reminder, the prior year fee income included benefits from a specific market opportunity in the context of governmental inflation compensation amounting to around $25 million. The segment result was up by 8% to 121 million. The operating result from insurance business increased compared to a relatively low prior year. The fee result was up by 5% to 81 million, driven by owned IFAs, despite continued investments in harmonization and digitalization of back-office systems. As mentioned at Investor Day 2024, those investments will continue throughout 2027. Cash remittance increased by 1% to 102 million. And I'm now turning to the international segment. Premiums increased by 7% to 1.4 billion due to higher premiums with private clients. Premiums from business with corporate clients slightly decreased. Fee and commission income declined by 2% to 189 million. Higher income from owned IFAs was more than offset by lower income from private and corporate clients. The segment result rose by 1% to 64 million. The fee result increased by 5% to 46 million, primarily driven by higher contribution from owned ISAs. This positive development was partly offset by a lower operating profit from insurance business, which was impacted by slightly higher claims. Cash remittance was up by 9% to 61 million, due to the statutory contribution. Let's move now to our asset managers, which reports in Swiss francs. Asset managers' total income was down by 2% to 496 million. In our PAM, business total income decreased by 3% to 172 million. Higher recurring income was outweighed by lower non-recurring income. In our TPAM business, total income was down by 1% to $325 million. Recurring income increased based on higher assets under management. Income from real estate transactions was also up. This was more than offset by significantly lower net income from real estate project development. The share of total non-recurring income for TPAM, meaning commission income and other net income from real estate project development, 14% compared to 20% in the prior year period. As mentioned at the 2024 investor day, we expect to achieve a share of non-recurring TPM income off on average around 25% over the period from 2025 to 2027. As indicated in Q1, we continue to expect this share also for the 2025 financial year to be around 25% given our pipeline. The second result decreased by 6% to 145 million. The contribution of PAM was up by 2% to 96 million based on increased operational efficiency. The TPAM contribution decreased by 19% to 50 million due to the significantly lower other net income. The TPAM cost income ratio improved to 82% largely due to higher commission income outweighing expenses. Cash remittance remains stable at 239 million. As a reminder, in the prior year, we had a one-off of 20 million from positive timing effects between income recognition and distributable cash related to real estate project development. Net new assets in our deep-end business strongly increased to 13.2 billion compared to 1.2 billion in the prior year period. We saw continued strong inflows with about 60% driven by our equity and bond-related index business. The remainder was contributed by active mandates. We had inflows of 3.9 billion in bonds, money market funds, and multi-assets. Inflows in real assets amounted to 1 billion, with 1.1 billion from real estate, which was partly offset by an infrastructure outflow due to an anticipated portfolio exit. Assets under management in our deep-end business increased to 138 billion compared to 125 billion at year-end 2024, driven by these positive net inflows. Let's move back to the group. Operating expenses increased by 2% in local currency to 1 billion, reflecting continued investments in business growth, for example in Switzerland, as well as in back-office digitalization in Germany. As outlined at our investor day 2024, we aim to keep life absolute costs stable by 2027. These amounted to 356 million in the first half of 2025, stable compared to the prior year. Coming to the investment income. Direct investment income increased by 46 million to 2.2 billion, driven by higher income from infrastructure and real estate that outweighed lower income on bonds. The non-annualized direct investment yield was stable at 1.5%. The net investment income decreased to 1.6 billion. The non-annualized net investment yield was at 1.2% compared to 1.3%. Net capital losses amounted to minus $317 million. The decrease of $270 million year-on-year is due to infrastructure, equities, and ethics hatching effects, partly offset by positive real estate value changes of $258 million compared to negative real estate value changes of minus $280 million. Let us continue with our investment portfolio on slide 15 and focus on real estate. Real estate fair value changes are positive at around 0.6%. This is a non-annualized figure. For the full year 2025, we expect further positive real estate fair value changes driven by our Swiss real estate portfolio. Real estate continues to be an attractive and important asset class for backing our long-dated liabilities in the context of our disciplined asset and liability management. We hold real estate because of the regular rental income provides and not because of appreciation. Vacancy rates were essentially stable at 3%. Moving on to insurance revenues on slide 16. Insurance reserves slightly decreased to 179 billion in local currency. On a statutory basis, we released in total about 0.15 billion of statutory reserves in the Swiss group and individual life businesses. Moving on to the CSM development. As outlined at our investor day 2024, our ambition is to increase the CSM through operating growth. In the first half of 2025, expected business contribution and new business together contributed 0.6 billion and the position experience adjustments and updates of actuarial assumptions added another 0.2 billion. The operating CSM growth is net of the CSM release of 0.6 billion, resulting in an operating CSM growth of 0.2 billion, as shown on the slide. In addition, economic and other non-operating variances contributed 0.2 billion to the CSM increase. This increase is driven by higher Swiss interest rates and by narrowing of the US dollar and Swiss franc interest rate differentials. real estate value changes also contributed positively. The annualized free tax CSM release ratio remained essentially in line with the prior year level. In total, the CSM after release representing future profit contribution grew by $0.4 billion to $14.8 billion. Shareholder's equity decreased by 10% to $6.6 billion compared to year-end 2024. This is due to the dividend payment and the ongoing share buyback, partly offset by the profit for the first half of the year. Our total outstanding financing instruments amounted to $5.6 billion after we repaid about $1 billion of bonds in June 2025 that were refined early on. The SST ratio is estimated to be around 205% at the end of June 2025, compared to 201% at the end of December 2024. This increase was driven by higher Swiss franc and euro denominated interest rates, a narrowing of the US dollar and Swiss franc interest rate differential, and the positive performance of equity and real estate markets. These positive effects overcompensated The 750 million hybrid repayment in June 2025, which led to a reduction of 4 percentage points of the SST ratio. The SST ratio remains above the ambition range of 140 to 190%. That brings me to our Swiss Life 2027 program and the progress reporting. I will start with the fee income on slide 22. Fee and commission income increased by 2% in local currency to 1.3 billion. Adjusting for the mentioned specific prior year market opportunity effect in Germany, the fee and commission income growth was at 4%. Profit from operation was up by 3% in local currency to 903 million, driven by the insurance business. The operating result from insurance business increased by 6% to 583 million. The lower CSM release year-on-year was more than positively offset by higher additional contributions, primarily driven by higher income from assets not packing life insurance liability and by the P&C business. The return on equity was at 17.6% on an annualized basis compared to 17.8% in the prior year and therefore within our target range of 17 to 19%. Turning to capital, cash, and payout. Cash remittance to the holding company decreased by 8% to 1.17 billion. As mentioned in earlier disclosures and commented today on the business review slides of Switzerland and asset managers, we had one-off effects totaling 0.14 billion in 2024. Adjusting for those effects, cash remittance increased by 4%. At the end of the first half of 2025, liquidity at holding amounted to around 1 billion. Our 750 million share buyback is on track. We repurchase shares worth 373 million as of 29th of August 2025. The program will run until May 2026. Let me conclude. In the first half of 2025, we continue to grow both our insurance and our fee businesses. We achieved growth in our profit from operations and strong net new asset inflows in TPAN. Our SST ratio remained at the strong level. With that, we had a successful start to our Swiss Life 2027 program and are on track to achieve all our group financial targets. As we continue to deliver on our promises, we maintain our commitment to disciplined execution. With this, I am back to you, Matthias.