Dear Shareholders 

Swiss Life generated a profit from continuing operations of CHF 172 million (+13%) in the first half of 2009. Earnings per share from continuing operations thus increased by 22% to CHF 5.62. Adjusted for extraordinary impacts and currency effects, we generated a premium growth of CHF 10.4 billion, up 7% on the prior-year level. The Group improved its result from operations by 11% and reduced its operating expenses by 3%. We achieved a net profit of CHF 139 million. In view of the challenging market environment, we can thus look back on a satisfactory first half.

CONFIRMATION OF STRATEGY – FOCUS ON PROFITABLE GROWTH | The strategy embarked upon last year proved its worth, despite the financial crisis and the correspondingly unpleasant market environment. We will continue to focus on the life and pensions market, the exploitation of growth opportunities and the achievement of functional and operational excellence. However, at present, both our cost base and our dependence on the financial result due to the emphasis on traditional business are impeding our capacity to act. To remain competitive in the closely-fought life and pensions market and to enhance our ability to compete, we must focus more strongly on client needs and product profitability and further reduce our cost base.

Swiss Life has thus introduced initiatives in all its markets to boost client orientation, efficiency and profitability. The efficiency increases, which will run into 2012, will cut costs by around CHF 350 to 400 million, compared to 2008. CHF 90 million of the cost savings were already announced in November 2008 as part of the process to streamline the Group’s head office. A large share will be realised in the Swiss division (CHF 188 million) and at AWD (CHF 95 million). Against this background, there will be around 520 job reductions in Switzerland by 2012. 480 will take place in the Swiss division: 220 through releases and around 200 through natural fluctuation; 60 vacancies have been deliberately left open in recent months. The job reductions will primarily affect areas which are not directly involved in advising and delivering services to clients. In connection with the job reduction process, Swiss Life is implementing a programme of measures which were agreed on with the social partners and which have been in force since 2004.

GREAT PROGRESS AT SWISS DIVISION | We have launched a series of initiatives in Switzerland to expand our position going forward and to implement our client-oriented growth strategy. We are thus strengthening the sales force with the aim of generating substantial premium growth. To achieve this, we will optimise our distribution organisation by January 2010. Besides lowering the number of general agencies from 58 to 42, the new organisation will enable us to intensify market development and the delivery of client services. In the future, 50 sales managers will support insurance consultants with their advisory and sales activities so that we can further improve the high quality of our advisory services to clients. We are also investing in a highly productive sales force infrastructure and in training. As part of our group insurance strategy, we are extending the product portfolio towards becoming a “full-range provider”, in addition to offering our full insurance model. This will enable us to further strengthen our position in the area of autonomous pension fund solutions. We are also intensifying our partnership with AWD and aim to write around 10% to 15% of new business in individual insurance through this distribution channel up into 2012.

EFFICIENCY ENHANCEMENT PROGRAMME AND RESTUCTURING MEASURES AT AWD | Despite the short-term difficulties experienced, AWD remains an attractive business segment for us strategically. In implementing our strategy we have also made clear and measurable progress in this area in the first half of 2009. We have advanced in our ambition to become one of AWD’s “best select partners”, with numerous products in Germany and Switzerland already achieving this status. Our increased selling power with AWD clearly stood out in the first half in terms of concrete achievements: In Germany we increased the premium volume generated through AWD by over one third. Thanks to its proximity to clients, AWD provides us with market intelligence and an in-depth understanding of client needs, which is very valuable to us in product development. The successful market launch of our Champion Duo product, which we developed together with AWD in Switzerland, is an excellent example of this.

In view of the difficult market environment, AWD is introducing a series of measures to accelerate its efficiency enhancement programme. The holding functions will be downsized as a result. In the future, the management holding will concentrate on coordination and controlling activities for the AWD Group, while reducing marketing and administration costs. In addition, the back office functions of the distribution organisations in Germany will be gradually centralised and thus optimised. In Austria, AWD will be repositioned by adapting the distribution structure and costs to the diminished market potential brought on by the financial crisis. In the UK, the break-even result for the first half confirms AWD’s objective of achieving a sustainable turnaround in this market in 2009. The initiatives implemented to further strengthen the brand position are a significant investment in the future of the AWD Group. All the measures in this programme will help return AWD to profitability and set the course for future growth.

Dear Shareholders, we have positioned the company in recent months for the persistently challenging economic environment and tougher competitive climate. With the measures to boost competitiveness, we are laying the foundations for Swiss Life to grow profitably and to exploit its business opportunities in the international life and pensions market.

Chairman of the Board of Directors Group Chief Executive Officer