Insurance industry on top form

Zurich, 24 January 2007 – The private insurance industry is operating from a position of strength. After the record number of claims received the previous year, the sector benefited from a generally favourable loss experience in 2006. The financial markets were also in excellent shape. At the same time, insurers took further steps to optimise underwriting, efficiency and cost structures. The Swiss Insurance Association (SIA) anticipates that its members' financial statements will probably be very good. Last year, insurers also managed to strengthen their solvency. The sector is now ideally equipped to meet future challenges.

Slight growth in non-life insurance…

Non-life insurance business performed well last year. The SIA anticipates a rise of around 1.8% in premium volume. Motor vehicle insurance saw the strongest gains, estimated at 2.8%. It has yet to be ascertained whether this market segment will see increased competitive pressure due to the ambitious growth targets of large motor insurers. Growth was moderate in other market segments.

… and a slight fall in life insurance

As in the two previous years, Swiss life insurance business (individual and group) reported a reduction in premium income in 2006. With an estimated drop of 1.8% across the whole sector, the decrease was pleasingly moderate in comparison to previous years. More than two thirds of total premium volume is accounted for by group life business, which has fallen by around 1.2% according to SIA estimates. In individual life business, the decline is greater at an estimated 3.4%. Individual single-premium endowment insurance in particular saw a considerable drop, which is not surprising in view of the low interest rates. The market for unit-linked life insurance, however, is likely to have risen by around 5%. There is a clear trend away from traditional endowment insurance towards unit-linked products.

Major revisions of insurance legislation under way
The sector is dealing with a number of important legislative issues. In relation to occupational pensions, the SIA considers the Federal Council's bill on faster reduction of the conversion rate to be extremely significant. The conversion rate is too high and must be brought down to stop unsystematic and unjust redistribution from employed individuals to pensioners. With regard to the revision of the Swiss Federal Law on Accident Insurance (UVG), the Association is calling for liberalisation and a clear distinction between private accident insurers and SUVA. The consultation process will continue till mid-March.

Private insurers and cantonal buildings insurers are working together on the introduction of national earthquake insurance. Due to the extent of the legal requirements involved, it has proven impossible to introduce this insurance by 1 January 2008, so the target is now 1 January 2009. The consultation bill for the total revision of the Swiss Federal Law on Insurance Contracts (VVG) is likely to be ready by the end of 2007. The VVG regulates the legal relationship between insurers and consumers, and is thus of extreme importance to the insurance industry. In the supervisory arena, the creation of a Federal supervisory body for the financial market is entering a decisive phase. The bill is due to come before the National Council in the spring. The private insurance industry wholeheartedly supports a strong, internationally recognised supervisory authority, as this would promote confidence in and the prestige of our financial sector.

Change of leadership at the Swiss Insurance Association

Albert Lauper intends to step down as Chairman of the SIA at the General Meeting to be held at the beginning of June 2007. The Board have taken the wishes of the current Chairman into account, and will propose to the General Meeting that Erich Walser be elected as his successor. Erich Walser has been a member of the Board of the SIA since June 1994, and Vice-Chairman of the SIA since January 2006. At the end of August 2007 Mr Walser will step down as CEO of Helvetia Patria Group and will continue to perform his duties as Chairman of the Board of Directors. Albert Lauper has expressed his pleasure about his proposed successor: "Erich Walser is an insurance expert with an excellent reputation, who knows the sector and its needs inside out. He will take over as head of a strong association which enjoys a superb position."

Speeches (in German)

• Albert Lauper: «Hervorragendes Jahr für die Schweizer Privatassekuranz»
• Roland Müller: «Umwandlungssatz, Überschussverteilung und Strukturreform in der beruflichen Vorsorge»
• Lucius Dürr: «Unfallversicherungsgesetz: Die Liberalisierung naht»