Ladies and gentlemen, welcome to the Swiss Life Q3 2026 trading update conference call and live webcast. I am Sandra, the Chorus Call operator. I would like to remind you that all participants have been listen-only mode 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 one 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 Matthias Aellig, Group CEO of Swiss Life. Please go ahead, sir.
Good morning, ladies and gentlemen. Thank you for dialing in and for your interest in Swiss Life. Today, we are reporting on selected top-line figures for the first nine months of 2026. I will start with an overview, and our Group CFO, Marco Gerussi, will give you more details. Swiss Life had a strong development in the first nine months of the year. I am particularly satisfied with the growth in our fee income across all divisions and businesses, meaning Asset Managers, owned IFAs, and own and third-party products and services. Fee and commission income increased by 8% in local currency to more than CHF 2 billion. Gross written premiums increased by 8% in local currency to CHF 17.4 billion, driven by an exceptional contribution from Switzerland.
Swiss Life Asset Managers reported net new assets of CHF 8.5 billion in third-party asset management compared to CHF 15 billion in the particularly strong prior year period. The SST ratio was estimated to be around 205% at the end of September 2026. In the first nine months, we continued on our growth path, and we are well on track with our Swiss Life 2027 program. With that, I hand over to Marco.
Thank you, Matthias, and good morning. I'm pleased to take you through our strong performance for the first nine months of the year. As usual, all figures are unaudited. Numbers for the Group are reported in Swiss francs, whereas for each business division and growth rates, these are stated in local currency. Let me start with our business division, Switzerland. Premiums increased by 15% to CHF 9.4 billion compared with 4% growth for the market. Premiums in Group life grew by 17% to CHF 8 billion, while the market increased by 4%. Single premiums increased by 33%, with approximately half of it due to higher premiums from existing and new clients, and the other half from an exceptional single premium contribution from a pension foundation. Periodic premiums were at the prior year level.
Assets under management in our semi-autonomous foundations increased to CHF 8.7 billion from CHF 8.6 billion at half-year 2026. Premiums in individual life grew by 4% in line with the market. Single premiums grew by 13%, driven by the unit-linked business. Periodic premiums declined by 1%. Fee and commission income was up by 9% to CHF 289 million, mainly due to higher income from unit-linked and investment solutions for private clients. Turning to our French, German, and international business divisions, which all report in euros. Let me start with France. Premiums were up by 4% to EUR 6.1 billion. The market grew by 6%. In our life business, premiums were up by 6%. The market grew by 7%. The unit-linked share in our life premiums increased to 72% compared to 66% in the prior year period and the market average of 39%, reflecting our unchanged focus on unit-linked solutions.
Overall, we generated life net inflows of EUR 1.9 billion. Total market net inflows amounted to EUR 47.6 billion. In health and protection, premiums were 4% lower, reflecting our continued focus on profitability. Market growth was at 6%. P&C premiums grew by 1%. Fee and commission income rose by 12% to EUR 493 million, driven by higher unit-linked fee income resulting from higher average unit-linked reserves due to net inflows and financial market performance. Structured products contributed further to the increase. I continue with Germany. Premiums were up by 2% to EUR 1.1 billion, driven by higher periodic and single premiums. The market declined by 3% due to lower single premiums.
Fee and commission income rose by 17% to EUR 744 million. The acquisition of TELIS Group was completed on July 1, 2026. Fee income includes TELIS for the first time with a contribution of EUR 45 million from July to September. Adjusting for TELIS, growth was 10%. Looking at the financial advisors and excluding TELIS, the number increased by 7% to 6,385.
The onboarding of TELIS is progressing well, and including the 1,862 advisors from TELIS, the total number of financial advisors was around 8,250. Turning now to international. Premiums decreased by 7% to EUR 1.5 billion due to lower premiums with private clients, only partially offset by higher premiums with corporate clients. Fee and commission income increased by 2% to EUR 286 million, driven by higher income from owned IFAs. Adjusted for the transfer of the network business to Generali earlier in the year, growth was at 5%. Let's move on to asset managers, which report in Swiss francs. We have expanded our disclosure, and as in Q1 2026, we additionally disclosed total income, which consists of commission income and other net income, including real estate project development. Asset managers' total income rose by 6% to CHF 789 million, driven by TPAM. PAM was flat.
In the TPAM business, total income increased by 10% to CHF 526 million. Recurring commission income was up 9%, with non-recurring commission income also contributing positively. This was partly offset by lower other net income from real estate project development. The share of total non-recurring income in TPAM, meaning commission income and other net income from real estate project development, was 12% compared to 11% in the prior year period. As mentioned previously, for each year, 2026 and 2027, we expect to achieve a share of around 25%. We have a strong visibility on our project development pipeline, and projects are progressing well, and we are reaching relevant milestones. Net new assets in our TPAM business amounted to CHF 8.5 billion compared to exceptionally high net new assets of CHF 15 billion in the prior year period. We saw continued strong inflows, with real assets contributing CHF 2.2 billion.
Other inflows were driven by equity and money markets. Assets under management in our TPAM business increased from CHF 146 billion at year-end 2025 to CHF 161 billion due to the mentioned inflows and performance. Turning to our investment result. Direct investment income was CHF 3 billion, CHF 0.17 billion lower than in the prior year period. The non-annualised direct investment yield was 2.1% compared to 2.2% in the prior year period. Net investment income increased to CHF 3.4 billion due to the net capital gains, driven by equities, infrastructure, and FX hedging effects. The net investment yield was 2.5% compared to 2% in the prior year period. 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.
Real estate fair value changes were positive at around 0.5% compared to 0.4% at the half-year . This is driven by our Swiss real estate portfolio and partly offset by negative fair value changes outside of Switzerland. For the full year 2026 and the entire real estate portfolio, we expect fair values to be at the prior year level. The continued positive contribution from the Swiss real estate portfolio is expected to be offset by negative fair value changes outside of Switzerland, particularly in France. Fair values in France are under pressure due to higher French interest rates, whereas good tenant demand supports rent levels. Across our total real estate portfolio, vacancy rates improved by 0.2%- 2.9%. Moving to solvency, liquidity, and payout.
At the end of the third quarter of 2026, the SST ratio was estimated at around 205%, and with this, approximately 10 percentage points below the June 2026 level. Almost half of the decrease was driven by the full deduction of the CHF 250 million share buyback and by the goodwill recorded for the acquisition of TELIS. About 1/3 was due to the adverse market development, reflecting the widening of the interest rate differential between the Swiss franc and the US dollar, and higher French government bond spreads. The remainder mainly relates to adverse lapse experience and the lowering of the UFR. At the end of the third quarter, Holding liquidity is at CHF 650 million. Our ongoing share buyback of CHF 250 million is well on track and will run until the end of March 2027. As of November 9th, 2026, we had repurchased shares worth CHF 54 million.
With that, let me sum up. We are pleased with the strong performance of Swiss Life in the first nine months of 2026. We grew both our fee and our insurance businesses, and our continued strong inflows in our third-party asset management business. Our SST ratio continues to be at the high level. We are well on track to achieve all of our Group financial targets for Swiss Life 2027. With that, I hand back to you, Matthias.
Thank you, Marco. We will now open the Q&A session. Who would like to start?
We will now begin the question- and- answer session. Anyone who wishes to ask a question may press star and one on the telephone. You will hear a tone to confirm that you have entered the queue. If you wish to remove yourself from the question queue, you may press star and two. Questions on the phone are requested to disable the loudspeaker mode and eventually turn off the volume of the webcast while asking a question. Webcast viewers may submit their questions or comments in writing via the relative field. Kindly note that webcast questions will be answered after the call. Our first question comes from Michael Huttner from Berenberg. Please go ahead.
Fantastic. Thank you so much. Thanks for this lovely, very clear presentation and the good outlook. I have two negative and one positive question. The first one is, the HoldCo liquidity to me sounds low. I had a memory, but probably wrong, that at the half-year you were at 1,100 maybe, but probably completely wrong. 650, I just can't— If you could maybe explain the moving parts, that'd be really helpful. The second one is on the SST ratio. I was actually really disappointed, 205. I was thinking, "Oh, no, that's not good." But it's not that you're well above. If real estate drops, so from whatever, 0.5% now to 0% at the end of the year, does that mean that the SST will drop further? What's the outlook look like here? The positive is the really bigger, much more important.
You said, I think, or I noted, reaching relevant milestones in project development. I just wondered if you can expand on that, because that sounds really exciting. Thank you.
Thank you, Michael. Marco can take the HoldCo cash question. I will go with the SST and the milestones.
The number you have in mind, that was the number, the CHF 1.1 billion we reported by half year, but also said during the presentation on, I think it was on September 1st, that as of today, on September 1st, it was at CHF 650 million. That is because we issued a new bond. We used part of it for the acquisition of the TELIS Group, and the remainder we used within our divisions for financing future growth. The number already in the last presentation was CHF 650 million, and now at the same level. That is the missing part in between.
Mm-hmm. Let me move to the SST ratio. As Marco said, almost half of the reduction that we have now reported between half-year and Q3 relates to two big, let's say, business decisions that we communicated. The buyback that we announced and the acquisition of TELIS, the goodwill of which is not eligible under SST, have made up almost half of this reduction. The other things, I think Marco elaborated in great detail. The reduction of the 0.5% fair value changes that we had until Q3, if that turns, as Marco said, in our expectation, to 0% at the year end, and if we also include, let's say, the effect of the BVG minimum rates that was communicated a couple of weeks or a couple of days ago, we have to say that the SST is slightly below the Q3 number.
But as I said, slightly below. Given the volatile markets, we do not know what happens until year-end , obviously. But if we include those two effects just mentioned, this has a slight reduction as a result. The milestone in the project developments, we have a pipeline which is really diversified across usages, different sizes, and what have you. Depending on, let's say, the progress of each and every individual project, there are some milestones that are relevant. If we look now at the entire pipeline we have, and Marco said it, we are progressing really well, and reaching those milestones then lead here and there to revaluation, so to additional fair value changes. I think we mentioned that at half year already. With that, we are clearly of the opinion to go for the 25% of non-recurring income in the TPAM. We really have good visibility there.
I know you do not talk about it much, but is there a particularly large project where we can say, "Oh, this is really good," or is it lots of little ones?
Look, I mean, we have in our pipeline larger projects and smaller projects. There is one we have talked about at the last Investor Day, and I think even at the one before that, this Frankfurt Westside. This is clearly one of the bigger projects, but we also have many relatively smaller and some even small projects. That is, I think, the important part. We do not rely on one single thing, but we have a pipeline that is nicely diversified.
Fantastic. Thank you very much.
Welcome.
The next question comes from Farooq Hanif from JP Morgan. Please go ahead.
Hi, everybody, and thanks very much. My first question is really around digging into the SST movement. You mentioned several things, some of which are forecastable and some of which are not. If we look at, for example, lapse rate and UFR and interest rate differential, can you give us some sort of guide to how material these things were so that we can get a sense going forward about how to model this? On the interest rate differential, has anything material also happened between now, sorry, between September 30th and now, that we should take into account when we're making our forecasts? My second question is understanding your buyback policy. I think in the past we were used to, if your SST ratio is above your strategic ambition range, then that really is a good place for buybacks continuing.
You've introduced also this HoldCo constraint. As in the previous question, that constraint seems to be quite a large one at the moment compared to your target levels. I'm just kind of wondering, are you happy for the market to consider buybacks to be really kind of an exceptional thing that you consider, or do you think, given your solvency position, you're in a really good position to continue buybacks while solvency remains above 190? Really sorry for the greedy questions, but on the mix of net new assets, my third question, in TPAM, can you give us an idea of that mix? It sounds like it's slightly higher margin than previous quarters, but if you could tell us a little bit about the mix in 3Q, that would be helpful. Thank you.
Okay, let me start with the capital management question. Marco will then go to the NNA mix and also give some more details on the SST. In terms of the buyback policy, I think we have established the current framework, which we have put on paper, I think, at the last Investor Day many, many years ago. It really, as you say, consists of two important elements. One is the SST being above the ambition range and also the HoldCo cash. This is nothing new. This comes on top of, let's say, the attractive distribution in terms of dividend, where we also have our policy put down at the, or laid down at the Investor Day. So, there's actually nothing new that we can talk about and just confirm what we said at the Investor Day last time and reiterated a couple of times since then.
Nothing new, nothing has changed in terms of the buyback policy. By the way, we have one ongoing now since the beginning of October.
Good. To the SST, I mean, as we said during the presentation, Matthias also mentioned, almost half of it is due to the two effects of the share buyback and the goodwill. Then we said indeed that around 1/3 is coming from market movements, which mainly relate to the interest rate differential, the Swiss franc to the US dollar, and to some extent also on the higher French government spread. So that was the main part of it. The other elements we've mentioned, that's a smaller part of the movement. So the adjustment of the ultimate forward rate, the UFR, and some lapse experiences, which we've, by the way, already considered in the models on the IFRS regime, so in the CSM. Some of them are already considered. So that's an update on that.
As of today, these movements, in particular the rate differentials, has no impact on the numbers. So that's something we can also say in addition to what we already said during the presentation.
Maybe to add on that, we appreciate the fact that there is some questions every now and then around the impact of those interest rate differentials, and we are considering to introduce, let's say, a meaningful sensitivity around interest rate differential for the full-year disclosure. As you know, and I think that's important, there it's about the differential at long maturity, so let's say at 10 years or something like that. That's what is driving this sensitivity. But as said, we're considering to expand the disclosure here.
And on the NNAs and the split of the NNAs, it is CHF 6.2 billion in securities, mainly equities, that were a large part of the inflows. But on the other side, CHF 2.2 billion real assets, CHF 2.1 billion is in real estate and CHF 0.1 billion is infrastructure. You are absolutely right. The share of the real assets increased compared to the half-year reporting. I allow myself also to say that we are positive on the outlook on the NNAs and the real asset share, something we also see in the overall number of assets under management. The CHF 161 billion, I think that is quite a good progress given the NNAs as well as the good performance.
Thank you very much.
As a reminder, if you wish to register for a question, please press star followed by one. Our next question comes from Kaya Batıkan from Kepler Cheuvreux. Please go ahead.
Thank you for the opportunity. I have one question related to German fee income. The German fee income grew 10% excluding TELIS. Can you give us some feel for what is driving the growth? Thank you.
The fee income in Germany, so it is mainly the larger part of it, let us say around three-quarter, I would say, is driven by the owned IFAs, so the distribution entity, where TELIS now in addition, comes into play, giving then the overall number of the 17% growth. And the remainder is coming from the insurance business. This is mainly unit-linked business in the insurance. But main driver are the own IFAs of the growth.
Clear. Thank you.
Welcome.
We have a follow-up question from Michael Huttner from Berenberg. Please go ahead.
Fantastic. I have three. I am being very cheeky. So, the BVG rate, could you I completely missed that. I mean, I know you said it, but I missed the change, if you could talk about that. The second, the TELIS 45 million number, can you give us a feel for what you expect? It felt a little bit low to me. Not very low, but a touch low, but maybe they were kind of disrupted due to the ownership change or whatever. But any feel for how TELIS is expected to grow?
And then the final, given I mean, these are actually good numbers, right? The fees are spectacular, and you have got lovely premiums, and these are good. And as you say, the real estate revaluation is actually the rental income, which goes into profit. Does this mean we should be thinking that profit is better than you had previously thought?
Thank you.
Let me start with the BVG. Marco can say a couple of words on TELIS and on the profit, by the way, which we don't guide anyway. The BVG rate, this is set by the Federal Council once a year. It was increased from 1.25%- 2%. Clearly, this is what we as an insurance association, or we as part of this insurance association, do not think is the right way to go, because the higher the guarantees, conceptually, the lower, let's say, the expected long-term returns. I think that's basic economics. On the other hand, we also have to notice that it affects only a relatively small portion of our entire business. We have essentially CHF 16.5 billion worth of technical reserves that are subject to that minimum interest rate.
In practice, if I look into the day-to-day management of the business, we do not expect that to be a relevant, let's say, restriction. However, in the SST, it has a certain impact, and this is the one that we have already taken into account when we talked about the SST as of today. With that, I hand over to Marco for the remaining two questions.
To TELIS, if you recall what we have said during the, let's say, presentation of the acquisition, is that it's around EUR 200 million of fee income coming now into the German business, making that up together in EUR 1 billion overall. If you split that by four, I think that the EUR 45 million, this is fully in line with the presentation and information we gave. I think important to us is that the onboarding is progressing pretty well. We are quite satisfied, and I don't repeat all the good reasons, the cultural fit, the strategic fit, the financial fit.
I think it's really a very good acquisition, which is, as I said, progressing well. Also, the 1,800 advisors I have mentioned during the presentation, which are now onboarded and contributing together with the already existing more than 6,000 advisors to the result in Germany. I think that's proof of itself. So it is progressing according to plan. I would not worry about that.
And maybe to add on that, Mike, it is by no means disruption from the ownership change. I mean, it just happens to be vacation in the summer, and I mean, this is the kind of stuff that always leads in each financial advisory business to a certain seasonality quarter- on- quarter. So as Marco said, the onboarding is really going well, and we are not concerned at all.
And in terms of profit, I mean, Matthias said it, we do not guide on profit, but I can recall some of the items we have in mind. I mean, I am sure you are fully aware of the increased tax rate in France. That is a topic, so that has been rolled over into 2026, this 10 percentage point higher tax rate, still the same level as we had in 2025. We once also informed on in the health area, this 2 percentage charge on the premiums, which has an impact on the numbers, and we are working on measures, successfully working on measures to mitigate that.
The fair values you have mentioned, overall in the IFRS framework, large parts of it are absorbed by the CSM, so not hitting the P&L, but there are still some assets outside of the policyholders, so there is some volatility of those numbers. We are working on that as well. And something also to keep in mind in view of TELIS, which I do not repeat myself, is a great acquisition, but we also informed in the half-year call on the bond we issued, the proceeds we used to acquire the company, which comes with borrowing costs. On the net profit level, I would not expect anything spectacular from the TELIS acquisition. So this is rather a low number this year and will increase with the growth then over the following quarters.
Brilliant. Super helpful. Thank you. Thank you. Thank you.
Welcome.
The next question comes from Iain Pearce from BNP Paribas. Please go ahead.
Hi. Just two from me. Firstly, on the direct investment income, I was a bit surprised that that didn't benefit more from the move in interest rates that we've seen. If I look at that versus Q2, [inaudible] Q1, and what we've seen last year, [inaudible] . Can you just run me through why you haven't seen that interest rate benefit in Q3? Then the second part is on the lapse assumptions and the impact in the SST, but you're saying that they are in IFRS.
I'm just trying to understand what assumption updates you've made, why they're in SST, or why they're in IFRS but weren't in SST, and if you're actually observing anything in lapse and which markets you're seeing changes in lapse experience, and if you're thinking this is just a short-term interest rate impact or something that might be a bit more of an issue going forward. Thank you.
Well, I start with the direct investment income, and I think that is in line with what we have said in earlier presentations and calls. The number was lower comparing to related prior-year periods in Q1 and the half year, so it is normalizing over the year. There is some intra-year effects and also some distribution patterns from the underlyings. What we see overall is some impact on the direct investment income coming from FX. The dividends, the coupons we get back, there is translation effects of FX. We have some exceptional high distributions had in the real estate and infrastructure area in the prior year periods, so that is something that is a bit seen in the numbers, but that is normalizing over the year, and we are getting back for year-end. We think we are getting back to the prior year, closer to the prior year level.
Let me mention also the net investment income that increased from 2.2 percentage point yield to 2.5 on a non-annualised basis, where we had gains in the equity area, for example, which shows the strong underlying portfolio and the positive development. But on the direct investment income, there is some normalization to be expected also by Q4.
Maybe to add on that, I mean, you mentioned the higher interest rate levels. I mean, just keep in mind that we have maybe 50% of our assets are in fixed income, and here I would say 3%-4% of them mature every year. There is obviously a very long response time, if you wish, to current interest rate levels. Then we go to the lapse question. On the lapses, I think there is, I mean, we do not want to get too technical, but there is different methodologies behind the IFRS and the SST regime. Just to mention one, in IFRS, there is a policyholder mitigation in the participating business. In SST, there is not. So there is, from a technical point of view, some differences in the methodologies and in the frameworks.
Talking about the business itself, lapses itself, this is mainly related to some areas, some businesses in France and in Germany, where we have seen, I think it is fair to say, in line with the market, some increasing lapses in certain areas and products, and that is just something we are now building into the models. But when you recall the presentation and detailing out the effects on the SST itself, it is from the remainder, one small part. That's one of the items, a small item in the overall SST ratio. It is just in line with the frameworks now implemented into the figures.
Thank you.
The next question comes from René Locher from ODDO BHF. Please go ahead.
Yes. Morning, all. Thank you. Just two follow-up questions. The first one on these guaranteed interest rate in BVG, when you take the CHF 16.5 billion in reserves and then x 0.75%, this adds more than CHF 100 million to the guarantees. On the asset side, we have a 5% decrease in the direct investment income. You're very relaxed, which is a good sign, but nevertheless, for me, it should have an impact on 2027. In this context, I was just wondering, any negative impact on reserve releases you were guiding in year 2025, 2026? That's my first question. Then the second one on TELIS, some rough calculation. The margin is around 12.5%-15% when I'm right, just for the TELIS business. What is interesting, the existing business has a margin of some 33%.
I was wondering, should we expect an increase on the TELIS margin going forward? The other question would be, what are driving the Group margin at a level of 33%? You must have very interesting or high-margin business in your portfolio. Thank you.
Thank you, René. Maybe first on the BVG question, just to put that into context. You may consult also the half-year booklet. There you see the 16.5 billion mandatory BVG reserves. They are to be seen in the context of the 68 billion worth of Group life business reserve in total. That's around one quarter, if I'm not mistaken, of the total BVG reserve. That means the increase on average of the portfolio is maybe less than 20 basis points. I mean, that's, I think, again, an important element to see in the context. If you compare what the average interest rate guarantee is in the BVG business, you will find it is probably, I don't know, 1% or something like that. Then you have to compare that to a running yield that was, what was it, 2%, something like that, on a nine-month basis.
The running yield on the portfolio is really vastly above these guarantees. I mean, that's, I think, the important part. On a P&L perspective, we are, let's say, allowed to take 10% of the top line in the Group life business. As long as we are far away from the guarantees, we are in a position to extract that 10% of the top line. You can infer from what I say is that we are obviously very far away from the guarantees. That's why, as you say, we are relaxed, even though conceptually, to be frank, we don't like this increase of the guarantee, because it is not linked to the development of the interest rates, of a rolling average of interest rates. I think that was the answer on the BVG. For TELIS, I refer to Marco.
Good morning, René. To be honest, I don't follow in all the details your calculation of the 33% margin. I've done a very quick calculation. I'm closer to around the 15% you have mentioned also relating to TELIS. What I can say is that the existing business, so to say, as well as TELIS, they come with attractive margins. I mean, I've mentioned that earlier in the call, that it's from a cultural, strategic, and financial point of view, a very good fit. It's, to some extent, the same business model and the same business, but on the other side, there is also some strengths in the different lines of business, so to say. Obviously, we, on one side, want to learn from each other. So, TELIS has some strengths I'm sure we can learn, and the other way around as well.
Overall, our strategy is scaling the fee business. Growing the net result of the fee result or the fee income that applies for the existing business as well as TELIS. All that together, coming back to your question of the margin, it's not only attractive, but we have the clear goal to grow that margin over time without giving any exact guidance on that. Hope that helps a bit.
Yeah, thank you. I will come back. Just on the reserve releases. It's Group and individual life, but increasing guarantees and impact on reserve releases going forward.
Look, the reserve release is never related to the old age savings account that is now subject to the minimum guaranteed rate. The [Non-English content] , as it's called in German, this is more like a bank account when it comes to the interest rate guarantee. It's an annual rate that is set again and again and again. We never had any reserve release from the old age annuity. The short answer is no, there's no correlation with that.
Okay. Excellent. Thank you very much.
You are welcome.
We have a follow-up question from Farooq Hanif from JPMorgan. Please go ahead.
Hi there. Thanks for the second opportunity. Just going back to your comment about the legal quote, which applies to the mandatory business. Clearly, in that CHF 16.5 billion, your income, just from direct income, excluding fair value, is getting close to the guaranteed level. My understanding is obviously you have fair value movements, plus you can, I guess, in the product charge other fees. Am I correct in thinking that even in the CHF 16.5 billion, you are not really anywhere close to having an issue in taking your 10% share? Is that the correct way to think about it? My second question, just as a follow-up, is German pension reform.
I am thinking this could be a positive for you, given that it will generate inquiries from people who want to work with your advisors to see what they can invest in through asset managers or insurance companies. Can you talk about the opportunity from that? Thank you.
More than happy to do so. Maybe to the first question on the BVG business, what is important, the legal quote covers the mandatory business and the extra mandatory business. There is no legal quote just in isolation. It applies to the Group life business in aggregate. It is pointless to think about any individual compartment of that business. I think that is the first important comment to make. The second comment is, the legal quote is an aggregate view on the savings part, on the risk part, and on the administration, so on the cost part.
It really is an aggregated view on the aggregated business, and there, as we said, there is a huge margin that, by the way, allows us and requires us from the legal quote to put the excess over the guarantees into the surplus fund, and you can consult there the Betriebsrechnung, and you see the amounts that we put into the bonus fund year after year. Yes, we are relaxed to confirm that again. In terms of the pension reform, I think we talked about it at the half-year , and I am just going to reconfirm what we said then. Before going into the details, let us keep in mind, the pension reform has an implication on the financial advisory business and also on the life insurance industry at large.
On the life insurance side, we specifically are not affected because we do not offer, for the last 10 years or so, the relevant products. We are not in that market. So whatever happens on the life insurance side, this is relevant for the market, but not for us at Swiss Life. On the financial advisory business, you are right. This is a very significant reform that kind of moves the market in a way that we have significant opportunities to advise clients on one line of business, on the old age provision. Keep in mind that in our financial advisory business, we have several lines of business, but the one about old age provision clearly has significant opportunities in 2027 when the reform becomes effective.
On the other hand, and I think I mentioned that at half-year , in that particular line of business, old age provision, the private old age provision, there we see clearly a slowdown in the second half of 2026 because in 2027, you have this new kind of offer, and there, as said, we clearly see significant opportunities to deliver financial advice and realize these opportunities in 2027.
Thank you. That's very clear. Thank you.
Welcome.
We have a follow-up question from Michael Huttner from Berenberg. Please go ahead.
I'm really sorry. You highlighted the gains and the 2.5% net investment income. Am I right in thinking that this would be part of the measures or actions or management actions or whatever, which you're taking to offset some of the negative impacts which you highlighted before?
I'm not exactly sure what negative impacts you're relating to, but the net investment income, basically, I mean, this is the direct investment income minus costs, so also hedging is playing a role there, and then including fair value changes. This gives overall then the net investment result. I elaborated on it. This is basically then the result of our asset portfolio management, so the strategic asset allocations we do here when we manage our assets on the insurance balance sheet. There is no particular management action to whatever issues you refer to counteract. That's normal course of managing our assets and the positive result out of it, how well the colleagues are doing that.
Okay. No, the negatives. I probably stated it wrong. I think you mentioned several tax points and things earlier. That is what I was referring to.
Oh, no. Okay. Tax, there I referred to France as a state. The French government decided back in 2025 to increase the tax rate in France by 10 percentage points. Then following all the discussions around the debt level in France, decided, unfortunately decided, I would have to say, to roll that over also into the financial year 2026. So there is a higher tax rate in France, so the French business in 2026 is, from an EBIT to a net profit basis, taxed on a higher level. But that has nothing to do overall with the net investment income we discussed earlier.
Brilliant. Thank you. Very clear.
Thanks.
Ladies and gentlemen, that was the last question. I would now like to turn the conference back over to Matthias Aellig for any closing remarks.
Ladies and gentlemen, thank you very much for your questions and for joining us today. Let me recap the key messages of today. In the first nine months of 2026, we continued on our growth path across all divisions, and I am pleased with our performance in both the insurance and fee businesses. We are well on track with the implementation of our Swiss Life 2027 program. This brings us to the end of the call with a save-the-date . Swiss Life will host an Investor Day on December 1st, 2027, and disclose our new strategic and financial program. Thank you again, and I wish you a nice day. Goodbye.
Ladies and gentlemen, the conference is now over. Thank you for choosing Chorus Call, and thank you for participating in the conference. You may now disconnect your lines. Goodbye.