Swiss Life Holding AG (OTCPK:SWSDF) Q4 2024 Earnings Conference Call March 14, 2025 4:00 AM ET Company Participants Matthias Aellig - Chief Executive Officer Marco Gerussi - Chief Financial Officer Conference Call Participants David Barma - Bank of America Farooq Hanif - J.P. Morgan Michael Huttner - Berenberg Iain Pearce - BNP Paribas Farquhar Murray - Autonomous Ahmed Lasit - UBS Michele Ballatore - KBW Bhavin Rathod - HSBC Henry Heathfield - Morningstar Operator Ladies and gentlemen, welcome to the Swiss ...

Full-year results 2024 Investor presentation 14 March 2025 Agenda Financial results and strategy update Marco Gerussi, Group CFO Overview Matthias Aellig, Group CEO 2 | Investor presentation | Full-year results 2024 CHF m FY 2023 FY 2024 Cumulative target 2022-2024 1 150 1 308 2.8-3.0 bn +14% Cash to Holding Targets according to Swiss Life 2024 strategic programme 1) Extraordinary tax provision release 2) FX adjusted, as outlined on slide 8 Fee result CHF m 658 875 FY 20232) FY 2024 Target 2024 850-900 +33% ...

Financial Data and Key Metrics Changes - Fee result increased by 17% to CHF 395 million, driven by higher contributions from asset managers and France [1][2] - Cash remittance grew by 19% to over CHF 1.2 billion, exceeding the cumulative target of CHF 2.8 billion to CHF 3 billion [2] - Annualized return on equity was at 17.8%, well above the target range of 10% to 12% [2] - Net profit for the half year was stable at CHF 632 million, with an adjusted increase of 7% year-on-year [2][5] - SST ratio remained well above the ambition range at around 205% [2][20] Business Line Data and Key Metrics Changes - Insurance revenue increased by 1% to CHF 4.5 billion, with higher DIA revenues from France and International [4] - Gross written premiums, fees, and deposits received increased by 3% in local currency to CHF 11.7 billion, mainly driven by France [5] - In Switzerland, premiums increased by 1% to CHF 6.1 billion, with individual life premiums up by 10% [6] - In France, premiums increased by 11% to EUR 3.8 billion, with life business premiums up by 12% [8] - In Germany, premiums were up by 3% to EUR 739 million, driven by modern and disability products [10] - International segment premiums decreased by 6% to EUR 1.3 billion, with lower premiums from private clients [11] Market Data and Key Metrics Changes - The life insurance market in Switzerland was up by 1%, while the market in France was up by 12% [6][8] - The unit-linked share in French life premiums was 66%, significantly higher than the market average of 38% [8] - Health and protection premiums in France grew by 6%, driven by price increases [8] - The German market was down by 3%, driven by lower single premiums [10] Company Strategy and Development Direction - The company is on track with the Swiss Life 2024 program to achieve or exceed all group financial targets, including cash remittance and share buyback targets [3][23] - The company aims to increase dividends per share and expects to exceed the return on equity and dividend payout ratio targets [3][23] - The target achievement for fee results remains reliant on the further normalization of the real estate markets in Germany and France [3][23] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving the lower end of the fee result target range of CHF 850 million to CHF 900 million [3][23] - The company noted that the real estate market dynamics in Germany are better than in France, with expectations of around 30% nonrecurring income for the full year [55] - Management acknowledged the challenges in forecasting due to market volatility but remains optimistic about the growth trajectory [31][32] Other Important Information - The value of new business decreased by 4% to CHF 266 million, attributed to lower interest rates and business mix effects [19] - Shareholders' equity decreased by 7% to CHF 7 billion, largely due to dividend payments and share buybacks [19] - The company reported a stable vacancy rate of 3.1% for real estate investments [17] Q&A Session Summary Question: Reserve releases in individual life - Management confirmed reserve releases of about CHF 0.15 billion for the first half of 2024, consistent with prior year [25] Question: Cash implications of real estate asset transfer - Management indicated a positive contribution from the transfer of real estate assets, noting it was not a special transaction [26] Question: Economic variances in CSM - The negative effect of CHF 0.3 billion in economic variances was mainly driven by interest rate developments [27] Question: Sustainability of French non-life results - Management stated it is too early to determine sustainability but confirmed ongoing improvements in the French non-life business [30][34] Question: Cash position at holding level - Management confirmed that the cash position is at the upper end of the target range and will continue to assess the situation [52][55] Question: Future cash remittances - Management indicated that the one-off effects should be considered when thinking about future cash remittances [64][66]

Financial Data and Key Metrics Changes - Adjusted profit from operations increased by 17% to more than CHF 2 billion, while net profit rose by 16% to over CHF 1.4 billion [5][12] - Return on equity was 12.8%, exceeding the target range of 10% to 12% [5] - Cash remittance increased by 21% to slightly more than CHF 1 billion [6][57] - Proposed dividend increased by 20% to CHF 30 per share, with a payout ratio of slightly more than 60% [6][58] Business Line Data and Key Metrics Changes - In Switzerland, gross written premiums were stable at CHF 9.9 billion, with individual life premiums down by 4% to CHF 1.5 billion [14] - Premiums in group life increased by 1% to CHF 8.4 billion, while single premiums rose by 2% [15] - In France, premiums decreased by 3% to €6.9 billion, with life business premiums down by 5% [20][21] - In Germany, premiums increased by 5% to €1.4 billion, driven by modern traditional and disability products [26] - International segment premiums rose by 21% to €1.3 billion, largely due to the acquisition of elipsLife [30] Market Data and Key Metrics Changes - The market for individual life in Switzerland grew by 2%, while Swiss Life's individual life premiums decreased [14] - In France, the life net inflows were €2.5 billion, outperforming the total market net inflows of €14.3 billion [21] - The P&C premiums in France decreased by 4%, primarily due to motor and home insurance products [22] Company Strategy and Development Direction - The company aims to structurally exceed its cumulative cash remittance target, which is crucial for growing dividends [9] - The focus remains on cash remittance and the transition to IFRS 17, with a separate call planned to discuss this topic [9] - The company is well-positioned to achieve or exceed all group financial targets as part of the Swiss Life 2024 corporate program [10][59] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the benefits of higher interest rates for both the company and policyholders, expecting positive effects to materialize over time [6][60] - The company anticipates further reserve releases due to higher interest rates, which will contribute to growing cash remittance in 2023 and beyond [8][64] - Economic fundamentals in Switzerland remain strong, supporting the resilience of the real estate portfolio [47][48] Other Important Information - The share of government bonds in the investment portfolio declined, while the share of corporate bonds increased [45] - Unrealized net gains on equities decreased to CHF 1.5 billion, while unrealized net losses on bonds amounted to CHF 7.9 billion [44] - The company achieved net new assets in the TPAM business amounting to CHF 9.8 billion, up from CHF 9.4 billion [39] Q&A Session Summary Question: Holding company cash levels and pro forma cash figure for buyback completion - Management confirmed that the holding company cash figure was CHF 0.8 billion at year-end, currently at about CHF 0.85 billion [68] Question: Insights on real estate and future net additions - Management indicated that negative net additions were due to timing effects, and they expect some net additions in 2023 [65][69] Question: Future reserve releases and dividend sustainability - Management stated that approximately 30% of the CHF 9 billion reserve strengthening over the past decade was outside the BVG business, with CHF 300 million released this year [72] Question: Sensitivity to interest rates and asset management flows - Management noted that higher rental income and reinvestment rates will contribute positively to cash remittance, with strong inflows expected in various asset classes [78][80] Question: Real estate development results and pipeline - Management expressed confidence in the repeatability of strong real estate development results, supported by ongoing demand and lower vacancy rates in Switzerland [86][89]

Financial Data and Key Metrics Changes - Fee and commission income grew by 15% to CHF 1.6 billion, with all sources contributing positively [3] - Gross written premiums, fees, and deposits received decreased by 2% to CHF 15.2 billion [3] - Direct investment income was CHF 2.95 billion, with a non-annualized net investment yield of 2.0%, up from 1.4% in Q3 2020 [5][23] - SST ratio as of September 30, 2021, was around 210%, above the target range of 140% to 190% [27] Business Line Data and Key Metrics Changes - In Switzerland, premiums decreased by 15% to CHF 7.7 billion, primarily due to group life [6] - In France, premiums increased by 25% to CHF 5.6 billion, with life business premiums up by 34% [10] - In Germany, premiums grew by 5% to CHF 1.1 billion, with fee and commission income rising by 20% to CHF 478 million [12] - International unit premiums decreased by 16% to CHF 810 million, while fee and commission income increased by 17% to CHF 249 million [14] Market Data and Key Metrics Changes - The life insurance market in Switzerland was down by 9%, while individual lines were up by 4% [6] - The French life market grew by 35%, compared to a weak prior year [10] - The German market decreased by 2%, driven by single premiums [12] - The overall market net inflows in France were CHF 17.2 billion, with Swiss Life's life net inflows at CHF 2.1 billion [11] Company Strategy and Development Direction - The company focuses on disciplined underwriting to protect and improve the quality of its insurance book [8] - The shift to semiautonomous solutions results in lower reported premiums, aligning with the strategy of quality before growth [8] - The company aims to achieve or exceed the Swiss Life 2021 financial targets and will report new targets for the next strategic program on November 25 [28] Management's Comments on Operating Environment and Future Outlook - Management expressed satisfaction with the strong performance in 2021, particularly in fee businesses [28] - There is good momentum in the fee businesses, with a 15% top line growth observed [36] - The international business has seen an uptick in premiums in the Asian private client business despite ongoing lockdowns [78] Other Important Information - The company achieved net new assets of CHF 6.3 billion in third-party asset management, reaching a total of CHF 100.1 billion in assets under management [4][20] - The vacancy rate was at 4.2% at the end of Q3, with expectations for a marginal increase by year-end [26] Q&A Session Summary Question: Cash holding and its changes - Management confirmed a cash holding of CHF 1 billion, with CHF 200 million earmarked for reinvestment over time [35][82] Question: Trends in financial advisers and asset management pipeline - There is still good momentum in the fee businesses, with a 20% growth in the number of financial advisers [36][37] Question: SST ratio and its relevance - SST ratio is still relevant, with no alternative considerations, and management expects a pickup in nonrecurring income [36][38] Question: Net investment yield impact on savings result - Higher net investment yield could positively impact the savings result, but policyholder sharing must be considered [55] Question: Vacancy rate expectations - The vacancy rate is expected to be slightly higher than the current level by year-end [56] Question: International business performance - The international business has seen growth in fee and commission income, particularly in the IFA business in the U.K. and CEE [80]