Review of Operations — Swiss Life Holding generated a profit of CHF 200 million in the 2010 financial year compared with CHF 40 million the previous year.

This marked improvement in annual profit vis-à-vis the previous year was largely achieved as a result of higher dividend payouts by subsidiaries, which climbed from CHF 57 million in 2009 to CHF 197 million in 2010.

Total income for Swiss Life Holding Ltd (Swiss Life Holding) was CHF 209 million in 2010, and total expenditure, including tax, declined to CHF 9 million compared with the previous year’s figure of CHF 58 million. The substantial reduction in expenditure is mainly on the back of extraordinary charges in the previous year in connection with the strategic disposal of business units in 2008.

A new loan for EUR 60 million was granted to Swiss Life Insurance Finance Ltd in the period under review. The total value of loans made in euros came to EUR 430.5 million as at the end of 2010. As a result of the strong Swiss franc, an unrealised currency loss of CHF 42 million was incurred after hedging operations. Interest received on loans fell to around CHF 40 million due to the lower euro. Since the end of the second quarter of 2010, the EUR/CHF exchange rate risk has been fully hedged with forward contracts.

In order to finance ongoing business operations, Swiss Life Holding made capital increases at Swiss Life International Holding AG of CHF 50 million in 2010. With foreign insurance companies grouped together in Swiss Life International Holding AG, the participation in Swiss Life Products (Luxembourg) SA was transferred to Swiss Life International Holding AG and not recognised through profit or loss. In addition, by merging its stake in Swiss Life Selection Ltd with Swiss Life Asset Management Ltd, Swiss Life Holding continued to streamline Group structure. The total value of participations amounted to CHF 3258 million.

Swiss Life Holding’s profit distribution to shareholders in the period under review came to CHF 77 million or CHF 2.40 per share. This took the form of a reduction in par value of the Swiss Life Holding share from CHF 12.00 to CHF 9.60. The company’s share capital thus totals CHF 308 million.

The convertible bond issued in 2004 for CHF 317 mil- lion was bought back on 10 June 2010. The outstanding nominal value was CHF 43 million. As a result, Swiss Life Holding is exclusively financed by equity.

Swiss Life Holding’s liquid assets (liquid funds plus time deposits) contracted to CHF 306 million, down from CHF 624 million. Conversely, a portfolio of easily tradable bonds and money market book claims for CHF 394 million was built up at the Swiss National Bank in the period under review. These share certificates are all eligible for repos and can generate liquidity at any time.