SVV Schweiz. Versicherungsverband
Swiss private insurance industry: a return to profitability
The Swiss Insurance Association (SIA) calculates that the private insurance sector returned to profitability in 2003. The insurance industry seems to have come through the worst of a rather turbulent period, nevertheless, any talk of having turned the corner is still premature. There are several factors pointing to a recovery: most insurers' investment returns rose over the past year, underwriting results (particularly in non-life) improved and, in some cases, good combined ratios were achieved. However, insurers are still faced with some major challenges. Their capital strength has been stretched and some of the parameters in FSOPP-related business do not reflect the reality of the situation. Furthermore, underwriting results in several lines are still negative and the financial markets are showing signs of volatility.
The SIA estimates that, due to the generally satisfactory claims situation, premium volume in Swiss non-life business rose by approximately 5% from CHF 18.4 billion to CHF 19.3 billion in 2003. Swiss life business, however (group and individual) incurred a drop in premium income of 4%, from CHF 34.6 billion to CHF 33.2 billion. Group life business volume is estimated to have remained unchanged, whereas individual life business results proved disappointing. Preliminary SIA estimates indicate a drop of 12% from CHF 11.3 billion to CHF 9.9 billion. The fall in single premium business was particularly severe.
Albert Lauper, the SIA Chairman, outlined the priorities for the coming year as being an overall improvement in non-life claims and expense ratios and the achieving of a highly-developed approach to risk management. Further priorities include improving transparency and the level of communication in the industry. Joe Bättig, Chairman of the SIA Life Committee and CEO of La Genevoise, highlighted the need for reform in the occupational pension system. He requested the introduction of a compulsory model for establishing the minimum interest rate, based on 60% of the rolling average for 10-year federal bonds and a conversion rate based on realistic actuarial principles. Lucius Dürr, CEO of the SIA, added his voice to the debate on gender-specific premiums. So-called unisex premiums would contravene the principle of risk-based premiums and freedom of contract and would ultimately act against the interests of the insured parties.
Head of Communications
Swiss Insurance Association
You can find a copy of this media release, the speeches given and
photographs of the speakers at www.svv.ch.