Non-life insurance
Non-life insurance covers risks related to individuals (accidents, illness), objects (vehicles, moveable assets, property, goods, etc.) or wealth (liability, financial losses, legal expenses, tourist assistance, etc.).
Companies and private individuals have a constant need to insure their goods, assets and income against loss or damage by paying a premium calculated and fixed in advance. Non-life insurance provides protection and security in many areas of life, making a major contribution to the economy.
Non-life insurance supervision
FINMA supervises a total of around 260
insurers. Of these, roughly 80 companies and 40 Swiss branches of foreign insurance companies are engaged in non-life insurance segments B1-B18 (see
Appendix 1 to the Insurance Supervision Ordinance (ISO)).
FINMA supervises private insurers engaged in accident and health insurance; mandatory basic health insurance and the Swiss Accident Insurance Fund (
SUVA) are primarily supervised by the Swiss Federal Office of Public Health (
FOPH). Key matters of consumer protection are dealt with by the
Ombudsman of Private Insurance and SUVA, the
Ombudsman for Health Insurance, or the
Swiss National Guarantee Fund in respect of mandatory motor vehicle liability insurance. For buildings fire and natural hazard insurance, private insurers in the cantons of Appenzell-Innerrhoden, Geneva, Obwalden, Schwyz, Ticino, Uri and Valais are supervised by FINMA, while the cantonal buildings insurers have monopolies in the other 19 cantons and are supervised at cantonal level.
The purpose of insurance supervision by FINMA is primarily to protect insured persons against abusive practices and the risk of insurance companies becoming insolvent.
FINMA protects insured persons' interests by constantly monitoring the
tied assets and actuarial
reserves of supervised institutions and ensuring that they have sufficient free unallocated equity (
Solvency I). Supervision is complemented by quantitative and qualitative instruments; these are the Swiss Solvency Test (
SST), used to calculate insurers' capital requirements according to their risk profile, and the Swiss Quality Assessment (
SQA), which focuses on issues such as corporate governance, risk management and internal control systems (ICS).
In the case of new insurers, FINMA issues an operating licence for the insurances lines applied for upon compliance with the relevant statutory criteria.
With the exceptions of natural hazard insurance, which has a standard tariff, and health insurance, tariffs and the general terms and conditions of non-life insurance do not require prior approval by FINMA. Despite the absence of a need to seek prior approval, FINMA is authorised to carry out follow-up checks to ensure that the tariffs for insured persons are not disadvantageous and do not jeopardise the insurer’s solvency and that the general terms and conditions of insurance comply with the statutory requirements.
The non-life insurance market
The premium volume (direct insurance business including health insurance) of non-life insurers supervised by FINMA in 2008 was over CHF 34 billion. Claims expenses (payments and movements in provisions) in the same year were in excess of CHF 22 billion. The largest areas in terms of gross written premiums (direct business) were motor vehicle insurance (28%), fire and property insurance (15%) and accident insurance (11%).