The Swiss insurance industry saw a 2.7 per cent increase in premium volumes for non-life business in 2021 compared with the previous year. The life insurance business, on the other hand, once again experienced a decline in premiums since financial year 2020, although individual life insurance policies actually rose by 3.2 per cent. The market for reinsurers has grown by an average of 5.5 per cent in Switzerland over the last 10 years.
Insurance benefits paid by private insurers enhance the resilience of the Swiss economy. During the pandemic, for example, the private insurance industry paid out an average of CHF 140 million per day for claims and pensions. And in the second year of the pandemic, the Swiss insurance industry managed to make benefit payments while working from home with no drop in service quality, despite the adverse circumstances. This is a testament to the advanced digitalisation in the sector. ‘Risk awareness increased among the population during the pandemic. That is one reason why the insurance industry can look back on gratifying growth in premiums for financial year 2021,’ said Rolf Dörig, chairman of the Swiss Insurance Association SIA, at the annual media conference in Zurich. The insurance industry is also considered a growth sector as it managed a moderate increase in the number of employees and jobs despite the pandemic.
Cyber attacks, power shortages and earthquakes identified as further major risks
The insurance industry cannot simply cover all risks. Major risks – which include a pandemic – would appear to be uninsurable at first glance. A major risk can annul the insurance principle and lead to immense economic and intangible damage to the economy and to society. But ‘non-insurable’ often simply means that the framework conditions are lacking and must first be established. And framework conditions include issues such as a legislative foundation that enables goal-oriented solutions in the interaction between the private sector and the state. Private insurers have used the pandemic as an opportunity to study the risk landscape of Switzerland in even greater detail. From this process emerged three major risks that the SIA believes do not receive the public attention they merit: cyber attacks, power shortages and earthquakes.
For the Swiss insurance industry, coverage of major risks forms part of its economic responsibility. ‘The tendency to always seek solutions to new challenges in regulation, government directives and prohibitions paralyses our country and hinders the domestic political reforms we urgently require. Our economy deserves framework conditions, or rather regulation, that will enable a prosperous, innovative and sustainable future for our country,’ said Dörig. The onus then is on the state to not only set appropriate framework conditions, but also to adapt them if the initial situation changes. This is the only way to insure that the insurance industry can contribute to a strengthening of resilience in the economy. ‘That applies in particular to occupational pensions; we urgently need adjustments to reduce redistribution from the actively insured to pension recipients,’ said SIA CEO Urs Arbter.
Non-life insurance experiences stable growth
According to the SIA’s calculations, premium volumes in the non-life business rose by 2.7 per cent in the previous year, continuing their consistent growth trend.
- + 1.1 per cent in motor vehicle insurance. The growth driver is comprehensive insurance. This was primarily driven by the further rise in the number of motor vehicles registered in Switzerland – and the purchase of more expensive vehicles on average.
- + 3.9 per cent in fire, natural hazard and non-life insurance. Insured values increased, as reflected in the higher premium volumes.
- + 2.5 per cent in motor vehicle insurance. This includes insurance for medical expenses such as sickness benefits. In addition to demand, premium development is also driven by rising healthcare costs and salaries.
- + 3.1 per cent in accident insurance. The main driver is the increase in payroll, although technical adjustments also had a slight impact on volume.
Life business has to hold its own in a challenging environment
Historically low interest rates have hampered the development of life insurance for years now. Premiums in this field stagnated between 2017 and 2019, and since 2020 they have been in decline. Low-interest conditions also greatly favour the trend towards capital-efficient products. However, the decline in financial year 2021 was due primarily to the decline in single premiums in group insurance. This reflects a certain stability on the labour market. They serve as an indicator that there were comparatively fewer job changes took place last year – and, as a result, fewer transfers of pension assets between pension funds. ‘The positive development of unit-linked individual insurance policies shows that the security offered by life insurance meets a growing customer need,’ as Urs Arbter explained at the industry association’s annual media conference. The development in premiums in group life insurance and individual life insurance is as follows:
- - 10.9 per cent in group life insurance. The reason for this significant change, along with the trend towards capital-efficient products, is lower single premiums, indicating a certain stability on the labour market.
- + 3.2 per cent in individual life insurance. In particular, unit-linked individual life insurance policies have become more popular as a means of covering risk and as an alternative to savings policies with very low or even negative interest rates.
The greater Zurich area – a major location for the reinsurance business
Over the past 10 years, the market for reinsurance in Switzerland has grown by an average of 5.5 per cent. ‘In the global market, the greater Zurich area has grown to become the third-largest location for the reinsurance business. The value creation of reinsurance companies based here has more than tripled within the past two decades,’ said Arbter. Although the complexity of the reinsurance business makes it impossible to make a qualitative assessment of the development of the premium volume for the past financial year at this stage, the SIA expects positive development in reinsurance in Switzerland for financial year 2021 based on statements to date on global business and claims development.
All presentations of the Annual Media Conference can be found at the bottom of the download area.
Note to the editors
The Swiss Insurance Association (SIA) represents the interests of the private insurance industry at national and international level. The association comprises around 70 primary insurers and reinsurers employing a workforce of 47,000 people in Switzerland. Overall, the member companies of the SIA account for around 85 per cent of insurance premiums generated in the Swiss market. This makes the insurance industry and, as a result, the SIA a major force in the Swiss economy. Private insurers are therefore committed to the successful and sustainable development of the areas they operate in, both in business and in social and political terms, meaning that they assume economic responsibility.
Swiss Insurance Association SIA
Andrea Hohendahl, Spokesperson
Phone: +41 44 208 28 21
Email: andrea [dot] hohendahlsvv [dot] ch
Head office phone: +41 44 208 28 28
Presentation and papers in German
Prämienentwicklung der Schweizer Versicherungswirtschaft 2021 – Präsentation zur Jahresmedienkonferenz1.31 MB
Rolf Dörig: Die richtige Balance zwischen Regulierung und unternehmerischer Freiheit finden0.1 MB
Urs Arbter: Die Prämienentwicklung der Schweizer Versicherungswirtschaft 20210.12 MB
Michèle Rodoni: Die Digitalisierung des Versicherungssektors – in einem geeigneten gesetzlichen Rahmen eine Chance für Branche und Kunden0.15 MB
Martin Jara: Toprisiken versichern bedeutet Teamwork0.12 MB
Markus Leibundgut: Die BVG-Reform läuft Gefahr, ihr Hauptziel zu verfehlen0.12 MB