Swiss Life Holding AG

Ladies and gentlemen, welcome to the Swiss Life presentation of the full year results 2025 conference call and live webcast. I am Sandra, the course call operator. I would like to remind you that all participants have been listened on remote and the conference is being 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 by 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 is my pleasure to hand over to Mr. Matthias Ehrig, 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 financial year 2025. I will give you a brief overview before handing over to our CFO, Marco Terussi, for more details. I'm proud of the operational performance and of what we have achieved in 2025. We grew the insurance business, meaning premiums, operating results, and the contractual service margin. We also grew the fee business at owned IFAs and with owned and third-party products and and we achieved strong net new assets in our third-party asset management. Altogether, we achieved growth in profit from operations and in the return on equity as well as a strong solvency level. On top of that, we propose a higher dividend to shareholders. Our results show the great commitment of our employees and advisors. I would like to thank all of them for their strong engagement and our customers for their continued trust and loyalty. Let me provide some more color on the 2025 operational performance. Swiss Life Group increased its profit from operations by 3% in local currency to 1.83 billion Swiss francs. Despite higher tax expenses, net profit was stable at 1.26 billion. The return on equity was at 17.2%. Operating profit from insurance business grew to 1.1 billion, up 6% in local currency. The fee result was at 858 million, slightly below the prior year, with growing contributions from owned IFAs and owned and third-party products and services. Asset managers' result was, as expected, below the very strong prior year. The SST was around 210% at the year end. Cash emittance in 2025 was 1.2 billion. The prior year included one-offs as flagged before. We propose to increase the dividend per share by 4% to 36.5 Swiss francs. This corresponds to a payout ratio of 82%. And the ongoing 750 million share buyback program is proceeding as planned and will run until the end of May 2026. Let us move to Swiss Life 2027. Our programme takes us a step higher on our success path as we strive to reach new heights for earnings and cash returns to shareholders. We are well on track with the implementation of our Swiss Life 2027 programme to achieve all our strategic actions and financial ambitions. We are highly committed to executing our program with discipline and to delivering on our promises. With that, I hand over to Marco, who will provide more details on the full year 2025 financial results and the Swiss Life 2027 progress reporting.

Thank you, Matthias. Good morning, ladies and gentlemen. Let me continue today's presentation by taking a closer look at our 2025 full year results. We begin, as usual, with some selected P&L figures shown on slide seven. Insurance revenue was up to 8.8 billion due to higher VAA revenues, mainly in France and international, as well as a higher CSM release partly offset by ethics translation effects. Insurance service expenses were lower at 7.5 billion, mainly due to lower claims and ethics. The net investment result decreased to 805 million. As a reminder, this is an IFRS 17 accounting figure which also includes various other items 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 1.8 billion, driven by the operating results from insurance business. Ordering costs increased to 160 million. This is due to refinancing effects. Income tax expense was up to 411 million, primarily due to France. As you know, the French government introduced in 2025 a higher corporate tax rate for large corporates. Ad profit of 1.3 billion is at the prior year level, despite, as just mentioned, higher income taxes and borrowing expenses. Turning now to further selected figures. Gross written premiums, fees and deposits received increased by 3% in local currency to 20.9 billion, supported by growth in all our insurance business divisions. P&C income was up by 5% in local currency to 2.6 billion. All sources contributed to this growth. Our owned IFAs, owned and third-party products and services, and our assets managers. The net investment income of the insurance portfolio for owned risk increased from 3.7 to 3.8 billion, largely due to positive real estate fair value changes. Operating expenses, excluding variable expenses, increased by 2% in local currency to 2.1 billion, mainly in our growing fee businesses. I will now move on to our segment reporting, starting with Switzerland. Premiums increased by 3% to 10.2 billion. The life insurance market was flat. Premiums in group life increased by 3%, while the market was down by minus 2%. Single premiums grew by 6%, primarily driven by new business and higher premiums from existing clients. Periodic premiums decreased by 1%. Assets under management in our semi-autonomous foundations increased to 8.4 billion, up from 7.8 billion at year end 2024. Premiums in individual life increased by 5%. This is a result of higher unit-linked single premiums in the second half of the year. Single premiums were up by 13% year-over-year, while periodic premiums were flat. The market increased by 4% overall. Fee and commission income was up by 6% to $359 million, mainly due to higher income from unit-linked business and from investment solutions for private clients. The segment result increased by 4% to $891 million due to a higher operating result from insurance business. Income from assets not backing insurance liabilities grew, driven by real estate and bonds. The fee result was flat at 55 million. Higher income was offset by continuous investments in growth initiatives, such as investment solutions for private clients, which we mentioned in previous disclosures. Cash remittance decreased to 0.65 billion. As a reminder, the figure for 2024 included positive one-offs of 0.12 billion. 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 4% to 8.1 billion, while the total market was up by 9%. In our live business, premiums grew by 5%. The market was up by 10%. The unit link share in our live premiums was at a high level of 69%. This compares to a market average of 39%. It generated life net inflows of 2.6 billion. Total market net inflows were at 50.6 billion. Health and protection premiums grew by 1% due to price increases. The market was up by 3%. P&C premiums were down by 1%. P&C income increased significantly by 10% to 593 million. Unit-linked fee income grew strongly based on higher average unit-linked reserves. Income from structured products remained stable at pleasing levels. Segment results grew by 8% to $361 million. The fee result was up by 7% to $197 million. As mentioned in previous disclosures, the contribution from structured products declined as the brokerage fees shifted to our operating result in the insurance business, where it emerges over time. The operating result from the insurance business was up by 9% to 165 million, driven by a higher contribution from the P&C business. Tax remittance increased by 3% to 191 million due to the statutory contribution. Let me address two relevant aspects of the political environment in France. First, as mentioned previously, the French government extraordinarily increased the corporate tax rate by 10 percentage points in 2025 for large corporates. For 2026, this higher corporate tax rate will apply again. And second, regarding the Social Security health reform, the French Parliament decided in December 2025 to introduce a 2.05% charge to the health and individual disability premiums. It will impact the segment result of our health and protection business in 2026. However, we remain focused on proactively navigating the environment and mitigating these impacts. Moving on to Germany. Premiums were up by 2% to 1.5 billion due to modern, modern traditional and disability products. The market was up by 5%, driven by higher single premiums. Fee and commission income increased by 7% to 881 million, driven by higher productivity at owned IFAs and by a higher contribution from the insurance business. The number of financial advisors increased by 2% year over year and was at end of 2025 at 6,083. 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 6% to 205 million. The operating results from insurance business increased compared to a relatively low prior year. The fee result was up by 6% to 127 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 2% to 106 million. Turning now to the international segment. Premiums increased by 6% to 1.8 billion, driven by higher premiums from the private client business. Fee and commission income declined by 1% to 379 million. Higher income from owned IFAs mainly in the UK was offset by lower income from corporate clients. The segment result rose by 10% to 130 million due to the operating result insurance business, which was supported by higher business volumes and an improved loss ratio with corporate clients. The fee result increased by 1% to 91 million. Cash remittance was up by 9% to 73 million due to the statutory contribution. Let's move now to our SMN address, which reports in Swiss francs. Asset managers' total income was down by 1% in both PAM and TPAM to a total income of 1.1 million. In the TPAM business, total income was 795 million. Recurring total income grew by 6% based on higher assets under management, while the contribution from non-recurring income was lower. The share of total non-recurring income for TPAM, meaning commission income and other net income from real estate project development, was at 27% compared to a very high level of 32% in the prior year. For 2026 and 2027, we expect to achieve a share of non-recurring TPAM income of around 25%. As in the previous year, about three quarters of the total non-recurring income for TPAM relates to revaluation gains, which are non-cash. Segment results decreased by 7% to $414 million. Contribution from PAM was down by 3% to $186 million, driven by the lower income and higher project-related expenses. The TPM contribution decreased by 10% to 229 million due to lower non-recurring income compared to a very high prior year level. The TPM cost income ratio improved to 81%, largely due to the higher commission income outgrowing expenses. Cash remittance grew by 3% to 250 million. As a reminder, in the prior year, we had a positive one-off of 20 million. Net new assets in our deep-end business strongly increased to 17.7 billion compared to 9.5 billion in the prior year. CISO continues strong inflows with about 65% of equity and bond-related index business. The remainder was contributed by active mandates with inflows of 3.8 billion in bonds, equities, and multi-assets. Inflows in real assets amounted to 2.6 billion with 2.1 billion from real estate. Assets on the management in our TPAM business increased to 146 billion compared to 125 billion at year end 2024, driven by positive net inflows and performance. Let's move back to the group. Operating expenses increased by 2% in local currency to 2.1 billion, reflecting continued investments in business growth as mentioned, for example, in Switzerland, back office digitalization in Germany, and project-related expenses in our asset management business. As outlined at our investor day 2024, the aim to keep life absolute costs stable by 2027 at three quarters of a billion. For the full year 2025, life absolute costs amounted to 735 million. Coming to the investment income. Direct investment income remained unchanged at 4.1 billion, and the direct investment yield was stable at 2.9%. The net investment income increased to 3.8 billion because of net capital gains, which amounted to 143 million compared to 71 million in the prior year. The increase was driven by positive real estate fair value changes. The net investment yield was up to 2.7% compared to 2.6% in 2024. Let's continue with our insurance investment portfolio on slide 16. Assets under management decreased to 143 billion mainly due to unrealized losses in our bond portfolio and lower cash assets in the context of lower rep positions. Real estate value changes were positive at around 1.3% 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 ALM. We hold real estate because of the regular rental income it provides and not because of appreciation. Vacancy rates were stable at 3.1%. Moving on to insurance reserves on slide 17. Insurance reserves increased 1% in local currency to 182 billion driven by France. On a statutory basis, we released in total about 0.3 billion of statutory reserves in the Swiss group and individualized businesses as we did in the previous years. Moving on to the CSM development. As outlined at our investor day 2024, our ambition is to increase the CSM through operating growth. In 2025, this growth amounted to a strong 0.5 billion. Expected business contribution and new business together contributed 1.2 billion. We generated another 0.5 billion mainly from the back book and CSM release increased to 1.2 billion. In addition, economic variances contributed 0.4 billion. This increase was driven by the strong equity market and real estate performance, and the higher interest rate is a narrowing differential to the US dollar. This was partly offset by Swiss franc depreciation against other currencies. The pre-tax ESM release ratio was at 7% and therefore slightly lower than in the prior year. In total, the CSM after release representing future profit contribution grew from 14.4 billion to 15.3 billion. Shareholder's equity decreased by 3% to 7.1 billion compared to year-end 2024. This is due to the dividend payment and ongoing share buyback hardly offset by the profit for the full year. Our total outstanding financing instruments amounted to 5.9 billion. Leverage ratio remained stable at 23% year over year and therefore within our reference level of 20 to 30%. The SST ratio was estimated to be around 210% at the end of 2025 and thus well above the ambition range of 140 to 190%. Compared to the SST ratio of 201% at the end of 2024, the increase was driven by the positive performance of equity and real estate markets. In addition, credit spreads decreased and the US dollar and Swiss franc interest rate differentials narrowed. This positive effects a party offset by a net reduction in hybrid debt of 500 million, which lowered the SST ratio by three percentage points. Let me add that as of today, the FFT ratio is estimated to be at the same level as at year end 2025. That brings me to our Swiss Light 2027 program and the progress reporting. As mentioned by Mattia, we are well on track to achieve all our 2027 financial targets. Let's go through the details and I will start with the fee income on slide 23. Fee and commission income increased by 5% in local currency to 2.6 billion. Own and third-party products and services as well as our own DIA phase were both up by 5%. Asset managers grew by 2%. Profit from operations was up by 3% in local currency to 1.8 billion as a result of a 6% growth in the operating result insurance business. The fee result was down 1%. Strong growth in our own IFAs and from own and third-party products and services was offset by the lower V-result from asset managers. The operating result from endurance business increased strongly by 6% in local currency to 1.1 billion. The main drivers were the higher CSM release as well as higher additional contributions primarily driven by higher income from assets not backing life insurance liabilities and the French non-life business. The return on equity was at 17.2% compared to 16.6% in the prior year and within our target range of 17 to 19%. Earning, capital, cash and payout. Cash remittance to the holding company decreased by 7% to 1.2 billion. And as mentioned, we had one-off effects totaling 0.14 billion in 2024. At the end of 2025, liquidity at holding amounted to around 750 million. Our share buyback is well on track. We repurchased shares worth 631 million as of 6 March, 2026. The program of 750 million will run until May 2026. Coming to the dividend. For the financial year 2025, the board of directors will propose a dividend of 36.5 Swiss francs to the AGM, up 4% from 35 Swiss francs in the previous year. This will result in a payout ratio of 82%, consistent with our target of higher than 75 and the ambition to increase the dividend per share. The dividend will be paid up in approval from the AGM on the 13th of May, 2026. Let me summarize. In 2025, we achieved growth in premiums, fee and commission income, and in our operating profits. Additionally, we saw strong net new asset inflows in TPAM. Life absolute costs were stable and our operating results from insurance business grew by 6% in 2025, while the CSM was significantly up. Our return on equity is within our target range. Cash remittance, dividend payout ratio, and our share buyback are well on track. And our SST ratio is on a strong level. Having said that, We are well on track with our Swiss Life 2027 program and we are convinced that with our determination, our diligence and our discipline, we will achieve all our group financial targets. With this, I'm handing back to you, Matthias.