The private Swiss life insurers active in the occupational pension scheme sector reported total revenue of CHF 7.2 billion – an increase of two per cent over the previous year. 92.6 per cent of this was passed on to the insured persons in 2018. In 2017 this figure was 92.1 per cent. The operating result, that is to say the share of the net result benefiting the insurance companies, came to CHF 534 million, four per cent lower than in 2017.
The eight life insurers active in the occupational old age, survivors’ and invalidity pension provision sector and supervised by the Swiss Financial Market Supervisory Authority FINMA manage approximately one-fifth of all pension assets in Switzerland (CHF 1,104 billion as at the end of 2017). They insure almost half of the 4.2 million active insured persons and serve just under one-quarter of the 1.1 million pensioners (as at the end of 2017).
Fewer employees with full coverage insurance
In 2018 the premium volume of life insurers active in the occupational pension scheme sector increased by one per cent to CHF 23 billion. However, the number of fully reinsured employees fell by four per cent to 0.98 million insured persons.
Slightly lower operating result
The life insurers reported total revenue of CHF 7.2 billion in the savings, risk and cost process – two per cent more than in 2017. After deducting the expenses in the three processes, this leaves a gross result of CHF 1.3 billion – a drop of approximately 22 per cent. In 2018 provisions amounting to CHF 776 million in total were released and CHF 1.5 billion went to the surplus fund. Ultimately, the life insurers with occupational pensions business reported a four per cent lower operating result than in 2017 of CHF 534 million.
92.6 per cent of income passed on to insured persons
Of the total revenue of CHF 7.2 billion, 92.6 per cent was passed on to insured persons in the form of insurance benefits and surplus dividends. For insurance contracts with a statutory minimum ratio, the payout ratio was 92.5 per cent. For business subject to the minimum ratio, the statutory minimum ratio of 90 per cent applies (see also the fact sheet on the minimum ratio).
Sustainable protection for insured persons
FINMA’s supervision is guided by the aim of ensuring the security and legally compliant use of the assets entrusted to the life insurers in the occupational pension sector. On the one hand, guaranteed insurance obligations are covered by separate tied assets which are subject to strict investment requirements with respect to quality, risk diversification, permitted asset classes, risk management and administration. On the other hand, so that they are able to meet their obligations at any time and so that insured persons are granted sustainable protection, each life insurer must have sufficient carefully calculated technical provisions.
Transparency report to be incorporated into insurance market report in the future
Today, FINMA publishes its report on the transparency of group life reporting for the occupational pension schemes of private life insurers in the second pillar. It is thereby providing transparency regarding the occupational pension schemes of private life insurers. FINMA will incorporate this report into the insurance market report from the 2019 reporting year.