Swiss in­sur­ers con­tin­ue to en­joy suc­cess

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The Swiss insurance industry performed well in 2014, generating growth and solid results once again. In the non-life business, the premium volume was up on the previous year. Although the premium volume for life insurance grew despite persistently low interest rates, the increase in the group life insurance segment was lower than in the year before.

Zurich, 26 January 2015 – The Swiss insurance industry can look back on another successful financial year. No major adverse weather events occurred in 2014. Once again, solid financial results, steady premium growth and further improvements in cost efficiency testified to the insurance companies' solidity and ability to perform in the year just ended. Private insurers emphasised their role as a driving force of the Swiss economy, with value creation of CHF 20 billion or around 4% of the whole economy, while employing 50,000 people and training 2,000 young professionals.

Stable performance for life insurance

According to projections produced by the Swiss Insurance Association (SIA), in 2014 the entire life insurance business posted a 1.1% growth, compared with 5.4% in the previous year. Although growth is being held back by persistently low interest rates, the premium volume generated in 2014 exceeded the figure for recent years.

In the group life segment the premium volume rose by 1%. Demand for the pension schemes offered by life insurers, with their unique guarantees, remained high. Following the major increase in the previous year (7.9%), growth settled at the same level as in earlier years. In the single life insurance business, premium volume grew by 1.3% in 2014, after having posted declining growth rates some of the time in recent years. Although life insurance products are only moderately attractive because of low interest rates, there is always demand for risk insurance products offering simultaneous capital protection.

Sustained growth in non-life insurance

The entire Swiss non-life insurance business grew by 1% last year. Growth was thus slightly weaker than in previous years. In a highly competitive and saturated market, this testifies to a continued solid performance.

The premium volume for motor insurance went up by 1.6%, which was more or less equivalent to the increase in vehicles insured. In the fire, natural disaster and non-life insurance segments, premium income grew by 1.1%, broadly in line with previous years.

Uncoordinated regulation acting as a brake on growth

Regulatory developments are giving the insurers cause for concern. "We depend on framework conditions that enable us to operate our business successfully. The big increase in regulation and the lack of coordination pose a risk to the industry and hold back growth," says Urs Berger, Chairman of the Swiss Insurance Association (SIA). "The final report of the panel of experts on the further development of the financial market strategy means that a basis for improvement is now on the table. However, the proposed measures must now be implemented."

Occupational pensions: ensuring security and freedom of choice for SMEs

The Swiss insurers look ahead with a mixture of confidence and vigilance. The removal of the minimum euro exchange rate is having only a limited impact on the insurance companies' investments, since most of the currency risks are already hedged. On the other hand, the outlook for the sector is clouded by the economic outlook, which has now been revised downwards, and especially the worsening of the low interest rate situation. However, this backdrop demonstrates the value of the unique guarantees offered by life insurers in the occupational pensions segment, since the insured persons need not fear any repercussions or losses.

It is therefore incomprehensible that the Federal Council wants to increase the statutory minimum surplus distribution quota for occupational pensions as part of the "Pension System 2020" reform. This proposal jeopardises not only the full insurance that is so popular with SMEs, but also the risk insurance. The guarantees provided by these models and the opportunity for SMEs to choose their own pension fund solutions must be preserved.

From consumer protection to an insurance partnership

Financial crises, regulatory developments and competition have an impact on the relationship between insurers and their customers. The insurers undertake to strengthen the position of the customer as an informed partner. They pride themselves on offering high quality advice and have set up the new training certification platform, Cicero, to help with this. This industry register records the professional training and development completed by customer advisers.