Stability and solid growth for Swiss insurers
“The Swiss insurance industry has been exhibiting successful development in the form of continuous and sustainable growth”, says Urs Berger, Chairman of the Swiss Insurance Association (SIA).
In an era of exceptionally turbulent financial markets, the Swiss insurance industry has once again proved itself to be a stabilising factor for the Swiss economy as a whole. Despite a period involving major loss events caused by natural catastrophes, insurers are looking back on a generally successful business year, with continued growth in non-life insurance. In group life insurance, premium volumes once again grew strongly.
Zurich, 3 February 2012 – Viewed in overall terms, Swiss private insurers are looking back on a successful 2011 financial year, and are expected to post solid to strong operating results over the next few weeks. In the insurance industry, cost management has once again been the dominant factor over the past year. Consistent pursuits of improvement in the operating business, a focus on profitability, and rigorous risk management have paid off.
Continued growth in non-life insurance
Premium volumes for non-life insurance as a whole achieved further growth in 2011, albeit at a slightly lesser rate than in previous years. For the year as a whole, and across all companies and business segments, premium volumes are expected to have grown by around 1.4%, compared to 2.9% in 2010.
In motor insurance, premium volumes rose by 2.8%, whereas premium volumes in accident insurance posted a slight decline of 0.5%.
Further growth in life insurance
In 2011, premium volumes in life insurance continued to grow. Despite the persistence of extremely difficult parameters as a result of exchange rate developments and a very low interest rate environment, premium volumes in the Swiss group and individual life insurance business as a whole rose by an impressive 3.3% in 2011.
The group life business remains on an upwards trajectory, and is continuing to gain ground in relation to individual life insurance. In 2011, premium volumes in group business accounted for 70% of all life insurance business. Premium growth in this segment increased by 5.3% last year. Swiss life insurers have therefore once again achieved a record performance in group life insurance.
The Swiss individual life insurance business is likely to have shrunk again last year, namely by 1.3%. However, this represents less of a decline in premium volumes than in 2010. Periodic premium volumes are expected to come in at the previous year's level. Single premium volumes in individual life insurance have continued to decline.
Interest in unit-linked individual life policies continues to be evident. To a large extent, this can be attributed to government regulations, such as the stamp duty of 2.5% on individual life insurance policies involving a single premium. The latter currently account for around 34% of individual life insurance premium volume. Premium volumes for unit-linked life policies involving a single premium rose slightly less than in the previous year, however, the growth rate still amounted to 3.6%, whereas unit-linked life policies with periodic premiums rose by 0.6%.
Combined ratio
The 2011 year was marked by a number of major loss events around the world caused by natural catastrophes (tsunami with the subsequent threat of atomic reactor meltdown in Japan, flooding in Thailand), which in some cases burdened internationally active insurers with record claims. In Switzerland, the most notable change compared to the previous year was the rise in claims for natural hazards due to significant hail damage and flooding. Nonetheless, the Swiss private insurance industry as a whole enjoyed a positive year. The combined ratio – i.e. the combined claims and expense ratios – is generally heading towards the 95% level. Last year, insurance companies once again made money from their core business and had no need to subsidise this with investment income. This reflects the business model of the Swiss insurance industry, which pursues a prudent, low-risk investment policy
Investments
Low interest rates, severe government indebtedness, the excessively risky nature of many foreign investments, and volatile stock markets have increasingly complicated the balanced placement of capital investments. The world is in the grip of a genuine “investment crisis” when it comes to the availability of low-risk, long-term investments. In Switzerland, moreover, the situation is further aggravated by a huge currency mismatch. The domestic investment market has shrunk massively. Despite the difficult economic environment, Swiss private insurers are posting solid to strong financial results.
“For almost a decade now, the Swiss insurance industry has been exhibiting successful development in the form of continuous and sustainable growth”, says Urs Berger, Chairman of the Swiss Insurance Association (SIA). “When viewed in terms of their contribution to gross domestic product (GDP), taxes paid and job creation, Swiss private insurers make a stabilising contribution to the Swiss financial centre. They posted robust growth once again in 2011, and are ideally positioned for another successful business year in 2012”.
Documents
Reviews of the year
Publications
Media releases
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