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Swiss Life to Cut 520 Jobs in Switzerland

Swiss Life Cuts StaffHurt by the poor performance of AWD, Swiss Life presented earnings reports largely under those expected by analysts.

The solvency of the insurer has remained nonetheless stable, though the company’s maneuverability has been severely limited as a result of excessive dependence on illiquid investments and a high cost structure.

The management believes that their costs are excessive in all sectors of their business and have launched a vast restructuring plan.

The goal is to economize 350 – 400 million francs through 2012 vis-à-vis 2008’s figures. Out of this amount to be saved, 90 million concerns measures announced last autumn. Over the past few days rumors have suggested that new cuts will be added to the plans already announced.

The restructuring will affect above all Switzerland (approx. CHF 200 million) and AWD (CHF 95 million). Restructuring costs amount to 40% of the hoped-for savings.

Swiss Life will eliminate 520 jobs in Switzerland, of which 220 jobs will be lay-offs. The management has promised a social plan to aid those affected by the process (outplacement, compensation, etc.) The measures are expected to be undertaken rapidly. Above all, the savings concern all fiscal year 2009 (CHF 65 million) and 2010 (CHF 70 million).

At the same time Swiss Life is attempting a major expansion into non-traditional product offerings for private coverage. These services are expected to represent 60% – 80% of their individual premiums by 2012.

At AWD, it’s the administration and holding activities which are the most affected by the restructuring. The sales figures have decreased 20% and over 40% in the UK and Austria; overall, AWD lost close to CHF 30 million.

Swiss Life is a market leader in life insurance products.

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